Majnu, 40, started labouring at the brick kiln in Uttar Pradesh’s Gautam Buddha Nagar district this year, when the previous one he worked at shut down after the government rolled out new rules – including a coal ban – to reduce heavy air pollution from the sector.

The green switch has been unaffordable for many kiln owners and has had a domino effect, with kilns closing one after the other in districts around the Indian capital.

“The kiln we were working at shut down and the owner sold his land to a builder,’’ said Majnu, adding that a house will be constructed there instead.

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Majnu had originally found work in the now closed kiln in the Ghaziabad district of Uttar Pradesh through a network of thekedars (contractors) back home, which helped him get his current job too.

“We did not lose a season of work when the kiln shut,” Majnu said. But there are concerns that things may become harder, with many labourers lacking access to social welfare.

Brick-making stops during the monsoon rains – when workers head home to their villages to work on the land, either on their own plots or as farmhands – and restarts at the end of the year.

Measures to ease air pollution

Brick kilns account for 6-7% of Delhi’s emissions of particulate matter, which contains black carbon (soot), according to government officials and researchers with India’s Centre for Science and Environment.

Since 2016, measures have been imposed on the kilns in stages, to cut pollution and help combat the capital’s toxic air. They include shifting the location of some kilns, mandating new, more energy-efficient technology, and last year banning the use of coal to fire the kilns.

Farm fields now line roads that cut through Ghaziabad district, in India’s Uttar Pradesh state, where brick kilns stood even until a few years ago, before many shut down due to new measures to cut air pollution. (Photo: Esha Roy/The Migration Story)

The effort is showing results alongside a range of other measures, with the air quality in Delhi having improved considerably. According to government data, the daily average air quality index in the capital fell from 225 in 2018 to 204 in 2023, showing lower levels of pollution.

But with no proper plans to help brick kiln owners and workers adjust to the changes in how they operate, the sector – which is among the country’s biggest employers, covering some 10 million workers – is floundering, labour rights experts and bosses said.

Unregistered workers

Saniya Anwar of non-profit The Climate Agenda, which advocates for a socially fair shift to clean energy, said most of the brick workers are unskilled, landless and change their phone numbers regularly, making it hard to register them.

“This in turn, means that they often fall outside the safety net of welfare schemes provided by the government for migrant workers,’’ Anwar added.

Like Majnu, Salam Hak, 29, also moved to Gautam Buddha Nagar when the kiln where he worked in Ghaziabad closed.

“We don’t have job cards (for work under the national rural employment guarantee scheme), so while we do daily wage (work) back home, it is not often easy to find,” Hak said.

“It’s the income from the kilns that sustains us through the year. There have been many kilns shutting, and we don’t know what will happen in the future – but we feel that there is no point worrying about it for now,’’ he said.

Hari Chand, 27 (first from left) and Shivam Rai 18 (second from left), hail from Chattarpur in Madhya Pradesh and work at a kiln in Uttar Pradesh’s Baghpat. While kiln owners in Baghpat said the sector is struggling with the new green norms, in this region, kilns have not shut down yet nor has labour been laid off. (Photo: Esha Roy/The Migration Story)

The 22 districts of the Delhi-National Capital Region are home to more than 3,800 brick kilns. Among these, Uttar Pradesh (UP) has the highest concentration of kilns at 2,062.

A state official working on pollution control said Ghaziabad is among the areas most affected by the green transition, with the number of kilns halving in the past six years, but there is no count of, or plan to support the workers who lose their jobs.

Another UP official in the labour department noted that brick kiln workers are seasonal rather than permanent and as such are not entitled to alternative government employment schemes that kick in when a factory shuts down, for example.

Excluded from state benefits

Living off agriculture alone would be tough for workers like Majnu and his family, who cultivate fields belonging to landlords and keep a portion of the crop, mostly rice paddy, as income.

“We are bhag chashis (landless farmers) back home, and we never make enough,’’ said Majnu, stacking the last lot of bricks next to mountains of agricultural waste being used to fire the Dankaur kilns.

“The earnings here (at kilns) are more than what we make back home, where we only get part of the crop to either consume or sell – whereas here, we make 600 rupees (around $7) per 1,000 bricks made and can make up to 1,200 rupees a day,’’ he said.

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The Building and Other Construction Workers (BoCW) Act of 1996 does include social security and welfare benefits for brick kiln workers, including scholarships, maternity benefits, marriage assistance, pensions, financial help for funeral services and food rations.

But labour experts say most brick kiln workers are not registered and therefore cannot access the benefits – neither have they been part of the energy transition conversation so far.

“The isolated nature of seasonal migrant workers at brick kilns is a major factor in preventing access to services, and makes them entirely dependent on the kiln owners,” said Ravi Srivastava, director of the Centre for Employment Studies at the Institute for Human Development.

The cost of going green

In Ghaziabad, a congested, booming industrial township 36 km from the capital, Ravinder Kumar Tewatia, former general secretary of the All India Bricks and Tile Manufacturers Federation, said 200 of 430 brick kilns have shut since 2018.

He closed the last of the four kilns he owned two years ago as norms got stricter and the business less profitable.

In 2016, the Environment Pollution (Prevention & Control) Authority gave all kilns in Ghaziabad a two-year period to switch to “zig zag” technology – an energy-efficient kiln design allowing chimneys to retain heat for longer.

Then, between 2022-2023, the Supreme Court ordered the annual period for manufacturing bricks to be cut from seven to four months and imposed the mandatory use of agricultural waste instead of coal to heat the kilns.

“Now you can’t get coal even if you want to,” Tewatia said, explaining that the main issue with farm waste – mainly wheat and mustard husks – is lower temperatures in the kilns where the clay bricks are hardened.

“As a result of this, the bricks that are being produced are of lower quality and more fragile,” he said.

Workers stack bricks at a kiln in Ghaziabad, Uttar Pradesh, as their shift comes to an end. (Photo: Esha Roy/The Migration Story)

Kiln owners said the shortened brick-baking season has impacted production volumes, hitting overall earnings. At the same time, falling brick quality has led to prices plunging by around half.

“We have been demanding that the government allow us to use a mix of coal and agricultural waste,’’ said Tewatia.

Pollution control board officials said the central government did provide alternatives, including biomass briquettes and compressed natural gas, but these also suffer from lower heat generation and gas is not suitable for use in most traditional kilns.

Farming fails to pay

The kilns have been a second home for Nidesh Kuma, 27, since he was a toddler, accompanying his parents to mould and shape bricks near Delhi, as frequent floods on the Ganges River prevents farming in their village.

For the past five years, Kumar has been “supplying” migrant workers from his Sambhal area of Uttar Pradesh to the Delhi region. This year, he placed 40 families in three kilns there, noting that his network is strong and extensive.

But with more brick kilns closing, the seasonal migration pattern has started to lose its appeal – and could be a sign of things to come, say labour rights campaigners.

“What can we do?” asked 55-year-old Laturi Singh, a brick-maker and labour contractor also from Sambhal.

“When the kilns shut down, most (workers) were absorbed at other kilns, but some have gone back to the villages and are working as daily wage workers earning 300 rupees a day, which is much less.”

(Reporting by Esha Roy; editing by Megan Rowling)

This article was first published by The Migration Story, India’s first newsroom to focus on the country’s vast internal migrant population.

Esha Roy is an independent journalist writing on issues of climate change, social development and government policy. Reporting for this story was supported by Buniyaad, a movement for a just transition in the brick kiln sector.

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European investors hold shares worth at least $65 million in major coal firms across China, India, the United States, Indonesia and South Africa within funds designated as “promoting environmental and social” goals under EU rules, an analysis by Climate Home and media partners found.

Taken together, these companies emit around 1,393 million tonnes of carbon dioxide (CO2) into the atmosphere every year, putting them among the world’s top five polluters if they were a country.

The investments are owned by major financial firms including BlackRock, Goldman Sachs and Fideuram, a subsidiary of Italy’s largest bank Intesa Sanpaolo. Most firms analysed are signatories of the Glasgow Financial Alliance for Net Zero (GFANZ), whose members pledge to align their portfolios with climate-friendly investment.

The asset managers told Climate Home their coal holdings do not contradict EU green policies or the 2015 Paris Agreement to tackle climate change.

At the COP26 UN climate summit in Glasgow in 2021, countries agreed for the first time to accelerate efforts “towards the phase-down of unabated coal power”. “Unabated” means power produced using coal without any technology to capture, store or use the planet-heating CO2 emitted during the process.

But rather than shrinking, global coal capacity has grown since the signing of the Glasgow Climate Pact with a fleet of new coal plants firing up their boilers, primarily in China, India and Indonesia. Coal miners in those countries have also boosted their operations to keep up with the increasing demand.

European leaders have heavily opposed this, with EU president Ursula von der Leyen saying the bloc is “very worried” about coal expansion in China.

“Light green” funds

The investments analysed by Climate Home have been made by funds classified under Article 8 of the EU’s Sustainable Finance Disclosure Regulation (SFDR), which the European Commission hoped would discourage greenwashing and promote sustainable investments when it was introduced in 2021.

Article 8 – known as ‘light green’ – refers broadly to a fund that has “environmental and social characteristics”, while the ‘dark green’ Article 9 refers more directly to sustainability.

The rules were also intended to offer members of the public more clarity on where asset managers invest their money and enable them to make an informed decision on whether they want their savings or pension pots to prop up climate-harming activities.

Workers shovel coal onto a truck at a coal yard near a coal mine in Huating, Gansu province, China. REUTERS/Thomas Peter

But a group of European financial market watchdogs warned this month the rules are having the opposite effect and called for an overhaul of the system.

“Status as ‘Article 8’ or ‘Article 9’ products have been used since the outset in marketing material as ‘quality labels’ for sustainability, consequently posing greenwashing and mis-selling risks,” they said in a joint opinion to the European Commission.

“The general public is still being misled when it comes to sustainable funds,” Lara Cuvelier, a sustainable investments campaigner at Reclaim Finance, told Climate Home. “The regulations are very weak and there is no clear criteria as to what can or cannot be included. It’s still in the hands of investors to decide that for themselves.”

Funding coal expansion

Climate Home identified investments in the biggest-polluting companies in the coal sector as part of a wider investigation led by Voxeurope, which tracked holdings by funds that disclose information under the EU’s sustainable finance directive.

These “green” funds include investments in mining companies like Coal India and China Shenhua – the respective countries’ top coal producers – and Indonesia’s Adaro Energy, as well as in giant coal power producers such as NTPC in India and China Resources Power Holdings.

All of these companies are planning large-scale expansions of their coal output, according to the influential Global Coal Exit List compiled by German NGO Urgewald.

No new coal mines, mine extensions or new unabated coal plants are needed if the world is to reach net zero emissions in the energy sector by 2050 and keep the 1.5C warming limit of the Paris Agreement “within reach”, according to projections by the International Energy Agency (IEA).

State-owned Coal India is the world’s largest coal producer, with fast-growing output topping 773 million tonnes in the latest financial year. It is targeting 1 billion tonnes of annual coal production by 2025-26 by opening new mines and expanding dozens of existing ones.

IEA calls for next national climate plans to target coal phase-down

In its latest annual report, Coal India cited “pressure of international bodies like [the] UN to comply with [the] Paris Agreement” as one of the main threats to its business. Coal India’s share value has more than doubled over the last 12 months on the back of stronger coal demand in the country, as extreme heatwaves have fuelled the use of air-conditioning among other factors.

State-run mining and energy giant China Shenhua plans to invest over $1 billion in 2024 to expand its fleet of coal power stations and build new coal mines. “We will keep a close eye on climate change to improve the clean and efficient use of coal,” its latest annual report said.

Big investors

The funds with stakes in those coal-heavy companies are managed by Fideuram, an arm of Italy’s largest bank Intesa Sanpaolo, US-based AllianceBernstein and Mercer, a subsidiary of the world’s largest insurance broker Marsh McLennan.

Coal investments in Fideuram’s Article 8 funds – worth at least $16 million – also appear to breach the company’s own coal exclusion policy, designed to rule out holding shares in certain coal firms.

Two of its flagship “emerging markets” funds claim to promote environmental and social characteristics including “climate change prevention” and the “reduction of carbon emissions”, according to information disclosed under EU rules. To achieve their ‘green’ objectives, the funds claim to exclude any investment in companies “deriving at least 25% of their revenues” from the extraction, production and distribution of electricity connected with coal.

But Climate Home found the funds include investments in at least six major coal companies exclusively or primarily involved in coal mining or power generation.

A coal-fired power plant under construction in Shenmu, Shaanxi province, China, in November 2023. REUTERS/Ella Cao

Fideuram did not answer Climate Home’s questions about the funds’ apparent breach of their own policy. But a company spokesperson said in a written statement that “investments in sectors with high-carbon emissions do not conflict with the objectives of the SFDR, which concern the transparency of sustainability investments, nor with the Paris Agreement, which promotes a transition to a low-carbon economy”.

A spokesperson for Mercer said its Article 8 fund, which holds shares in NTPC and China Resources Power Holdings. has an exclusion policy to avoid investing in companies that generate more than 1% of their revenue from thermal coal extraction. “Based on the data provided by ISS [a provider of environmental ratings], no groups involved breach the 1% threshold, and therefore, the fund is not in violation of its SFDR commitments,” they added.

AllianceBernstein did not respond to a request for comment.

Coal-hungry steelmaking

While excluding investments in so-called thermal coal used for electricity generation, several ‘green’ funds put their money in companies producing coking coal – or metallurgical (met) coal – which is used to make steel.

Goldman Sachs’ Article 8 funds hold shares worth several million dollars in Jastrzebska Spolka Weglowa, Europe’s largest coking coal producer, and Shanxi Meijin in China. BlackRock offers exchange-traded funds (ETFs) tracking indexes that include investments in SunCoke, a leading met coal producer in the US and Brazil, Alabama-based Warrior Met and Shanxi Meijin.

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Reclaim Finance’s Cuvelier said that, up until recently, the focus has been on pushing thermal coal out of investor portfolios because the alternatives to met coal in steel production were “less developed”.

“There are now increasing calls on financial institutions to cover met coal as well in their exclusion policies as alternatives exist,” she added. “It’s becoming very important because there are new projects under development that should be avoided”.

A spokesperson for BlackRock said: “As a fiduciary, we are focused on providing our clients with choice to meet their investment objectives. Our fund prospectuses and supporting material provide transparency as to the methodology and investment objectives of each fund”.

Goldman Sachs did not reply to a request for comment.

Reforms on the horizon

At the end of 2022, the European Commission began a review of the SFDR’s application with a view to updating its sustainable finance rules.

Future reforms may include changes to the ways funds are categorised. “There are persistent concerns that the current market use of the SFDR as a labelling scheme might lead to risks of greenwashing… partly because the existing concepts and definitions in the regulation were not conceived for that purpose,” the Commission said in a consultation paper released last year.

It also indicated that the existing categories under Articles 8 and 9 could either be better defined or scrapped entirely and replaced with a different system. The new Commission, yet to be formed following last month’s elections, will decide if and how to move forward with the reform process.

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Separately, the EU’s market supervisory authority, ESMA, has recently issued guidelines to prevent funds from misusing words like “sustainability”, “ESG” – environmental, social and governance – or “Paris-aligned” in their names. A handful of the funds with coal investments analysed by Climate Home have used those labels.

Under the new guidelines, asset managers wanting to slap climate-friendly labels on their funds will have to exclude companies that derive more than a certain percentage of revenues from fossil fuels.

Climate Home produced this article with data analysis contributions from Stefano Valentino (Bertha Fellow 2024) and Giorgio Michalopoulos. This article is part of an investigation coordinated by Voxeurop and European Investigative Collaborations with the support of the Bertha Challenge fellowship.

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Speaking on Monday at an old London coal power plant-turned-shopping centre, IEA head Fatih Birol said he would be “very happy” to see new NDCs (Nationally Determined Contributions) that “include no new unabated coal and also early retirements of existing coal”.

In 2021, the Glasgow Climate Pact, agreed at the COP26 UN climate summit, called on countries for the first time to accelerate efforts “towards the phase-down of unabated coal power”. “Unabated” means power produced using coal without any technology to capture, store or use the planet-heating carbon dioxide emitted during the process.

Birol, a Turkish energy analyst, said that stopping coal-plant construction was “as our North American colleagues would say, a no-brainer”. Yet, he added, while “the appetite to build new coal plants is in a dying process, some countries still do it”. He singled out China’s plans to build 50 gigawatts (GW) of new coal plants.

Shutting down existing coal plants, particularly young ones in Asia, is more difficult because the companies that have built and operate them would lose money, Birol noted. There is almost $1 trillion of capital to be recovered from existing coal plants, “so who is going to pay for this?” he asked, calling it “a key issue”.

Birol praised the Just Energy Transition Partnerships that have been set up between wealthy countries and several coal-reliant emerging economies like South Africa and Indonesia to help address the problem. He added that “there are some countries in Asia who can, in my view, afford to retire their coal plants earlier”, without mentioning which.

Malaysia’s Deputy Prime Minister Fadillah Yusof announced at the event organised by the Powering Past Coal Alliance, which includes 60 countries, that Malaysia aims to reduce its coal-fired power plants by half by 2035 and retire all of them by 2044. It will also tackle social and economic challenges through reskilling programmes for workers and promoting renewable energy adoption, he added.

Speaking later at London’s defunct Battersea power station, Indonesia’s deputy minister for maritime affairs and investment, Rachmat Kaimuddin, explained some of the challenges his country faces in phasing out coal.

Kaimuddin (right) speaks alongside Germany’s climate envoy Jennifer Morgan (centre) in London on June 24, 2024. (Photo: Powering Past Coal Alliance)

After China and India, Indonesia has the world’s biggest pipeline of new coal power plants under construction. Kaimuddin said the state energy company would not build any more but added that cancelling existing contracts is “very, very difficult” unless the company constructing the plant wants to pull out – which none have yet.

In addition, shutting down existing power power plants is expensive, he said, because many coal power plants have “take or pay” contracts signed in the 1990s under which the government pays them whether their electricity is required or not.

Another concern is that the Southeast Asian nation does not want to lose its energy security in the switch to renewables, Kaimuddin noted. Indonesia currently mines domestically most of the coal it uses. “We’re trying to partner with other people to try to build [a] renewable supply chain in the country,” he said.

Millions of people in Indonesia work in the coal industry, he added, so a shift towards clean energy will need to include new jobs for them. “It doesn’t have to be green jobs – it has to be jobs, right?” he said.

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Singapore’s climate ambassador Ravi Menon told the same event that the economies of China, India and Indonesia are growing and so are their energy needs, meaning that renewables have to be rolled out rapidly to meet demand.

Energy storage is also required to smooth intermittent supply from solar and wind, while electricity transmission infrastructure, including power lines, is needed to transport power from solar and wind farms to cities that account for a large share of consumption.

Both Kaimuddin and Menon said carbon credits should be used to offset losses for the owners of coal plants that are shut down early. “Retiring [plants] definitely will destroy financial value and… and we also need a better way to compensate them,” said Kaimuddin.

The event’s focus on coal raised concerns among some campaigners. Avantika Goswami, climate lead at the Delhi-based Centre for Science and Environment, told Climate Home that “singling out coal” in the NDCs, rather than including fossil fuels more broadly, “equates to giving a free pass to oil and gas-dependent countries, many of whom are wealthy”.

It could penalise many developing countries, where coal is a cheap source of fuel and energy needs are still growing, she warned.

“A global climate policy that allows unfettered use of oil and gas – which together account for 55% of fossil fuel emissions – is incomplete and inequitable,” she added.

Romain Ioualalen, global policy lead at advocacy group Oil Change International, said the IEA’s head should know that “the time to focus only on coal as a climate culprit is over”. He pointed to a subsequent agreement at COP28 last year where governments agreed to “transition away” from fossil fuels in their energy systems, without setting a deadline.

“We need a full, fast, fair, funded phase-out of all fossil fuels. Setting such a low bar for ambition is out of touch and inequitable, keeping the door wide open for major oil and gas producers,” Ioualalen added in a statement.

He called on rich countries that are “most responsible” for the climate crisis to foot the bill for a just transition. “We know they have more than enough money. It’s just going to the wrong things like fossil fuel handouts,” he said.

(Reporting by Joe Lo; editing by Megan Rowling)

This story was updated after publication to include comments from Avantika Goswami at the CSE and Romain Ioualalen at Oil Change International,.

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The G7’s top leaders convene in Italy this week as the world swelters through its 12th hottest month on record. One key issue that needs to be addressed is G7 members’ continued bankrolling of coal, from fossil fuel subsidies to public financing and private investments.

The latest evidence shows that the world’s largest banks – the majority of which are headquartered in G7 nations – continue to pour fuel on the fire of coal expansion.

As the G7 summit approaches, there is a chance for countries to match their rhetoric with action. It is not enough for governments and regulators to “call on” private finance to end their support for coal power. The continued financing of coal by the private sector shows that countries must take concrete steps to implement policies that stem the global flow of funds that fuel the expansion of the coal industry and redirect them to clean energy investments.  

Bonn talks on climate finance goal end in stalemate on numbers

While attention is often directed at public fossil fuel subsidies for coal (which are a problem), the billions of dollars in commercial financing for the coal industry’s expansion cannot be ignored. Commercial banks provided a staggering $470 billion to the coal industry between 2021 and 2023 – money that could have otherwise been channelled into clean energy investments, grid infrastructure improvements, and energy efficiency. 

And the majority of this financing comes from financial institutions headquartered in G7 countries. Collectively, these banks provided $101 billion for coal development in the form of loans and facilitated bonds between 2021 and 2023.  

Worst offenders: US and Japan

Topping the list of offenders are US and Japanese banks, which are the largest coal lenders in the world. Bank of America, actually increased its funding of the coal industry by 30% between 2016 and 2023. It provided a whopping $6 billion in loans and facilitation of capital market issuances to the coal industry in the last three years. For perspective, $6 billion is the size of the entire GDP of the Maldives.

Japanese banks are not faring better.  Coal financing between 2021 and 2023 remained dominated by its megabanks, Mizuho ($8.1 billion), MUFG ($6.1 billion) and SMBC ($4.7 billion).  

Estimates suggest that the absolute greenhouse gas emissions associated with the activities financed by commercial banks in G7 countries are more than the combined emissions of Germany, Italy, the UK, and France. While banks do not directly produce all these emissions, they are borne out of their lending and investment activities of companies that they support.  

No shortage of public money to pay for a just energy transition

The ironic cherry on top is that this amount provided by commercial banks in G7 countries to the coal industry is more than twice the total pledged by the G7-led International Partners Group (IPG) to support the Just Energy Transition Partnerships (JETPs), an intergovernmental initiative intended to provide technical assistance and financial resources to help developing countries with their clean energy transitions. 

Coal phaseout unclear

Nor is the G7 showing great leadership when it comes to their own coal phaseout plans. The US alone still has over 200 gigawatts (GW) of remaining operational coal capacity alone. While this has been falling, there are also signs that this decline is stalling – 200 GW is more than the entire coal operating capacity of all the JETP recipient countries. And Japan has no clear coal phaseout plan despite its commitment.  

This shows that the capital required for the energy transition is available, but just poorly allocated. Financial regulations, such as stricter capital requirements and outright prohibitions, play a crucial role in redirecting capital and investments towards the energy transition. This must include setting international standards to stem the flow of funds towards the continued expansion of the coal industry and restrict financing to coal developers that continue to contribute to environmental degradation and air pollution.  

Financial regulation

The Italian presidency of the G7 2024 has a responsibility to prioritise climate-forward action across different sectors, including financial regulation. G7 Central Banks need to keep up the pressure on keeping climate action at the forefront of negotiations, and call for more international coordination and standard setting. 

Even if the G7 achieves its coal exit goal by the “first half of the 2030s”, this timeline falls short of what scientists say is necessary to limit global warming to 1.5°C, a critical threshold to avoid the most catastrophic impacts of climate change.

As UN Secretary-General Antonio Guterres said last week, “We are in control of the wheel that takes us off the highway to climate hell.” Individual G7 members must take an introspective look at changing outdated policies to adopt strong, binding regulations on private financing for coal.  

The data on private finance for coal is attributable to Urgewald and can be accessed at www.stillbankingoncoal.org.  

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He added those countries should be “leading from the front” through much deeper emissions cuts, and bigger and better climate finance.

A day later, the gathering of the most powerful industrialised democracies responded with a tepid outcome, serving up a new commitment on ending coal power generation – weakened by a loophole in the language – a rehash of previous pledges and nothing new on climate finance, this year’s top priority in climate diplomacy.

For the first time, G7 countries all agreed to end the use of coal power generation in their energy systems “during the first half of the 2030s”.

While most members of the bloc are already planning to phase out coal before 2035, the commitment marks a step forward for Japan, analysts said. The Asian nation generates over a quarter of its energy from coal and, alongside Germany and the United States, had previously blocked international efforts towards setting a target date to shut down coal power plants.

Germany has written into its legislation a final target to exit coal by 2038 at the latest, but the government now intends to pull that forward to 2030. The United States unveiled new regulations last week under which coal plants planning to stay open beyond 2039 will have to cut or capture 90 percent of their carbon dioxide (CO2) emissions by 2032.

Not enough

But the G7 coal-power agreement struck on Tuesday in Turin, Italy, comes with a caveat that gives countries an alternative choice to phase out coal “in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with countries’ net-zero pathways”.

Gilberto Pichetto Fratin, Italy’s minister for environment and energy security, told journalists at the end of the summit that the text “for the very first time uses a deadline, wherever possible”.

“G7 countries undertake to phase out the use of coal without jeopardising the various countries’ economic and social equilibrium,” he added.

Researchers say that, even if countries do stick to the mid-2030s deadline, it will not be enough to limit global warming in line with the goals of the 2015 Paris Agreement.

G7 countries need to phase out coal from power generation by 2030 at the latest, and gas by 2035, according to a recent analysis done by Berlin-based policy institute Climate Analytics.

G7 climate and energy ministers meet at the Reggia di Venaria Reale in Italy. Photo: G7 Italy

“It’s notable that gas has not been mentioned [in the G7 ministerial agreement],” said Jane Ellis, head of climate policy at Climate Analytics, pointing at increased investment in domestic gas facilities. “This is absolutely the wrong direction to be heading in – both economically and for the climate.”

In their final communique, ministers said that “publicly supported investments in the gas sector can be appropriate as a temporary response, subject to clearly defined national circumstances”, in their efforts to reduce dependency on imported Russian fossil fuels.

They also repeated a previous commitment to eliminate “inefficient fossil fuel subsidies by 2025 or sooner”, without providing a clearer definition of “inefficient” or details on how that goal would be achieved.

Fossil fuel subsidies across G7 countries hit an all-time high of $199.1 billion in 2022, according to analysis by IISD and the OECD. “It’s very clear they are not going to meet that target,” said Farooq Ullah, senior policy advisor at IISD.

No progress on climate finance

This week’s ministerial meeting in Italy also failed to significantly move the needle on climate finance, as UN negotiations on a new collective quantified goal (NCQG) at COP29 in November are starting to gather pace.

G7 countries said in their final text they “intend to be leading contributors to a fit-for-purpose goal” and acknowledged the need for “mobilising trillions”, but stopped short of making any new financial commitment or offering clear ways forward.

The existing goal is set at $100 billion a year, but developing countries – excluding China – need an estimated $2.4 trillion a year to meet their climate and development needs, leading economists have said in a report commissioned by the Cop26 and Cop27 presidencies.

In order to loosen the purse strings, it is crucial that every minister across government cabinets – and especially finance ministers and treasurers – “push climate action into high gear”, the UNFCCC’s Stiell said on Monday.

But, according to Luca Bergamaschi, director of Italian think-tank ECCO, they appear “not to be caring enough about climate finance”.

“Climate ministers are hitting a wall on climate finance. These decisions rest on finance ministers so they need to step up, and step in, because they have the power and responsibility to do so,” he told Climate Home.

Meetings of G7 finance ministers in mid-May and country leaders in June are seen as last-ditch opportunities to push things forward.

Experts believe an ambitious deal on climate finance at COP29 can play a crucial role in getting developing countries, especially the poorest ones, to commit to stronger action on curbing emissions and boosting adaptation as they draft their new national climate plans due early next year.

The G7 ministers in Italy made a firm pledge to submit their own such plans – called nationally determined contributions (NDCs) – by the February 2025 deadline “with economy-wide, absolute reduction targets” that cover all greenhouses gases and sectors “in line with 1.5C”. They also called on other major economies to do the same.

The post G7 offers tepid response to appeal for “bolder” climate action appeared first on Climate Home News.

Hundreds of labour-intensive mines are expected to close in the coming decades as they reach the end of their lifespans and countries replace coal with cleaner low-carbon energy sources.

But most of the mines likely to shut down “have no planning underway to extend the life of those operations or to manage a transition to a post-coal economy,” US-based think tank Global Energy Monitor (GEM) warned.

Dorothy Mei, project manager for GEM’s Global Coal Mine Tracker, said governments needed to make plans to ensure workers do not suffer from the energy transition.

“Coal mine closures are inevitable, but economic hardship and social strife for workers are not,” she said.

GEM looked at 4,300 active and proposed coal mine projects around the world covering a total workforce of nearly 2.7 million. It found that more than 400,000 workers are employed in mines set to cease operations before 2035.

Shanxi hardest hit

If plans were implemented to phase down coal to limit global warming to 1.5C, only 250,000 miners – less than 10% of the current workforce – would be required worldwide, GEM estimated.

China’s coal industry, the world’s biggest, currently employs more than 1.5 million people, GEM estimated. Of the 1 million job global job losses expected by 2050, more than 240,000 will be in the province of Shanxi alone.

China’s coal sector has already undergone several waves of restructuring in recent decades, with many mining districts in the north and northeast struggling to find alternative sources of growth and employment following pit closures.

“The coal industry, on the whole, has a notoriously bad reputation for its treatment of workers,” said Ryan Driskell Tate, GEM’s program director for coal.

“What we need is proactive planning for workers and coal communities… so industry and governments will remain accountable to those workers who have borne the brunt for so long.”

The post One million coal jobs face the axe globally by 2050 appeared first on Climate Home News.

The ADB’s “energy transition mechanism” (ETM) makes use of private and public capital to refinance investments in coal-fired power, allowing power purchase agreements to be shortened and plants to be shut as much as a decade earlier than planned.

ADB’s senior climate advisor Warren Evans said negotiations on the Cirebon One project in Indonesia were now on schedule, and talks were also underway to launch similar projects in the Philippines and Vietnam.

“This is the first that has ever been done, so there are a lot of challenges and uncertainties to be resolved, but the negotiations are proceeding and we expect this to go forward soon,” he told Reuters.

“If we are successful across the countries we are having discussions with right now – if we are successful in reducing the lives of 50% of coal-fired power plants – this will be the largest decarbonisation initiative the world has seen.”

Loan-based finance

The mobilisation of climate finance to help developing countries adapt to climate change will be a major theme at Cop28 climate talks in Dubai this year.

Developed nations have not yet fulfilled a pledge to make $100 billion in annual funding available by 2020, but even when they do, it would not be enough, Evans said.

ADB recently launched its Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), a donor-backed guarantee facility allowing it to free up billions of dollars of capital for loans to climate projects in the region.

IF-CAP, launched in May, was criticised by charity group Oxfam, which said it would pile more debt on Asia’s most vulnerable communities.

Evans said he agreed that more concessional and grant finance would also be required to help poor communities adapt, but “action needs to be taken now”.

“If somebody comes up with a different model, where there is funding available, we’ll be all for it,” he said.

The post ADB set to launch first coal early retirement scheme in Indonesia appeared first on Climate Home News.

The coal to clean credit initiative aims to plug funding gaps in the Just Energy Transition Partnerships (Jetp) agreed last year between wealthy nations and Indonesia, South Africa and Vietnam to wean them off coal power.

Currently in the late stage of development, the offsetting scheme is linked to the early closure of coal plants and their replacement with renewable energy. The greenhouse gas emissions avoided in the transition would be monetised through carbon credits.

Nations or companies will be able to buy them to compensate for their direct greenhouse gas emissions in the pursuit of their own climate targets.

Seismic change

Joseph Curtin, a managing director at the Rockefeller Foundation and one of the scheme’s creators, says these carbon credits could be “a game-changer” in fast-tracking the replacement of coal with clean power in emerging economies.

“Carbon credit finance will be instrumental in getting the industry moving. We see it as making up for some of the weaknesses [in Jetp deals],” he told Climate Home. “ This carbon finance will blend with and unlock private and concessional [with more generous terms than offered in the market] capital, which is theoretically available to support the just energy transition but is not flowing”.

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But experts warn there are a number of concerns about using carbon finance to phase out coal, especially given the massive number of credits potentially on the line. The project developers hope to retire dozens of coal plants with support from carbon credit finance, leading to gigatons of avoided emissions and, as a result, offsets.

“Phasing out coal plants is absolutely essential, but whether or not this should be eligible for carbon crediting is another question entirely,” Jonathan Crook from Carbon Market Watch told Climate Home. “If the credits were to be generated with an unrealistic baseline or aren’t additional in nature, then they actually would undermine ambition”.

Jetp ambitions

Last year a consortium of rich countries – made up of G7 nations plus the EU, Norway and Denmark – development banks and private financiers signed Jetp deals with Indonesia, Vietnam and South Africa.

The multi-billion dollar agreements are supposed to help recipient countries move away from coal which generates most of their electricity while supporting workers in the transition.

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The programmes, which are at various stages of implementation, have attracted some criticism over the type of financing.

Recipient countries have been calling for grants and cheap loans because they don’t want to be burdened with more debt. But G7 countries with tight purse strings have been pushing back on those terms.

“Let’s be honest, there is very little new truly concessional capital on the table and a lot of disappointment in Jetp countries,” says Curtin, who believes new solutions need to be developed to keep the green deals on course.

Carbon credit solution

The idea of using carbon credits to fund energy transition projects in coal-reliant countries was floated at the end of last year by John Kerry, the US special envoy on climate. Kerry said the private sector could be “enticed to the table because you then have a way of them getting something they need and want, which may be a credit towards their goal”.

Some of the Jetp partners, however, have been sceptical about this solution. The German minister Jochen Flasbarth told reporters at Cop27 they had “some concerns that the commitments we gave as governments should not be replaced by private offsetting”.

About 60% of Indonesia’s electricity is produced from coal. Photo: Ezagren

For months, a group of philanthropies involved in Jetp and carbon market specialists have been busy trying to turn this into reality. They have secured a partnership with the Indonesian government, begun talks with South Africa and Vietnam, and sounded out interest from investors.

Crucially, they have also been working on the thorny matter of setting the rules for this new type of offset. The methodology will determine which projects qualify, and how the emission reductions are calculated and translated into carbon credits. Climate Home News has not been able to see the terms which are still under discussion.

Number of concerns

Carbon Market Watch’s Crook says it’s difficult to comment on specifics without consulting the methodology but he underlines how delicate the task is.

“There a number of factors that would have a large impact on the volume of credits generated and the overall credibility of such an approach,” he said. “The stringency of additionality tests, the assumptions on the future viability of coal plants and the capacity at which they would run.”

South Africa’s coal lobby is resisting a green transition

Additionality is one of the key tests of any offsetting project: in simple terms, this concept boils down to whether the project would have been possible without carbon credit financing.

Proving this could be tricky in a scenario where multiple funding streams – including public finance – are being directed at the same set of activities. In Indonesia, for example, five separate energy transition schemes are moving ahead at the same time.

Renewable energy link

Curtin says the initiative is targeting “relatively new coal plants” with power purchasing agreements of 20-30 years. He added the methodology includes a series of tests assessing regulatory, economic and financial conditions to prove additionality.

The rules will also determine how to establish a direct link between the closure of a coal plant and the rollout of renewable sources to make up for the electricity shortfall. The simplest solution under consideration involves the installation of renewables on the same site as the coal plant. But the programme developers say there will be a number of options available.

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Curtin says the role of gas in this scheme “has not been quite bottomed out yet”. “We don’t want new gas plants to be built to replace coal ones, but some gas may be needed to bring in the renewables,” he added. The prospect of expanding gas consumption, even just temporarily while renewables ramp up, would likely anger campaigners keeping an eye on the Jetps implementation.

Flooding the carbon market

Curtin acknowledges that devising the methodology has been “extremely difficult and technically challenging”. He says the initiative is striving for the “Goldilocks zone between extremely strong environmental integrity and yet having to be realistic to work on the ground”.

The initiative is eager to unveil the rules at Cop28 in November and clinch a first project agreement next year. South Pole, one of the world’s biggest project developers, will be in charge of the implementation on the ground.

If the scheme reaches their stated ambition, it could have far-reaching consequences not only for the Jetp, but for carbon markets more widely.

Buyers appeal

At scale, coal-to-clean offsets could in fact rise to dominate the carbon market. Each coal plant closure is expected to generate tens of millions of credits. Fewer than twenty of the world’s biggest forest protection offsets produce a similar volume of offsets.

The future buyers of the credits will also be closely watched. Curtin says the initiative has so far attracted the most interest from countries keen to purchase credits under article 6.2 of the Paris Agreement.

This is a mechanism allowing countries to exchange offsets through bilateral agreements and count them towards their climate goals, or nationally determined contributions (NDCs).

Governments like Switzerland, Singapore, Japan and South Korea have shown the most interest in using article 6.2.

Given the high stakes, Carbon Market Watch’s Crook said it is paramount to get the scheme right. “One mustn’t forget the broader context: these credits — which could be issued at a huge scale — will be used to offset real ongoing emissions,” he said. “If the finer details end up being wrong, then you have a serious problem”.

This article was updated on 22 June to make the scheme’s name more prominent

The post Carbon credits touted as saviour of coal-to-clean energy deals appeared first on Climate Home News.

From 2015 to 2020, Mazibuko held public office as a councillor in the Emalahleni Local Municipality. Now, through a a non-profit called Bullet Mkabayi Foundation, she has actively lobbied against the rapid deployment of renewables and the country’s planned coal phase out. 

“We have been lobbying, and will continue to lobby our people to say: reject this thing. It is not going to work for us,” Mazibuko told Oxpeckers and Climate Home News. 

South Africa is at the heart of one of the most ambitious energy transition deals in the world — an $8.5 billion partnership with a group of wealthy countries, among them the US, UK and EU. The Just Energy Transition Partnership (JETP) seeks to phase out coal in the country by 2035. 

But the nation’s coal sector has exerted a significant pushback to this plan, partnering with politicians and even managing to water down or delay key policies, such as the Climate Change Bill and the Carbon Tax Act. 

Local business group tries to keep South Africa’s coal plants alive

Mazibuko, for example, has held meetings with political leaders such as the Mpumalanga Premier Refilwe Mtshweni-Tsipane, and members of the Department of Mineral Resources and the Presidential Climate Commission. She defends a continued use of coal. 

“Coal lobbying has the greatest impact on green energy investments by increasing uncertainty and thus reducing the appetite of investors to invest in green energy,” said Mary Stewart, chief executive of climate consultancy Energetics.

South Africa currently relies heavily on coal for about 70% of total electricity production. The country is also one of the top five coal exporting countries in the world, hosting an influential coal mining industry. 

Several major companies with stakes in the coal sector have kept fossil fuels in their corporate planning. The petrochemical company Sasol, for example, claims to lead development of a “gas economy”, while South Africa’s public electricity company Eskom plans to “repower” stations using gas, according to their 2021 sustainability report.  

Coal lobby 

Progress on South Africa’s energy transition depends on phasing out 14 existing coal-fired power plants, as well as accelerating the deployment of renewable energy. But the coal sector has so far resisted this transition. 

During discussions on South Africa’s Climate Change Bill, a landmark climate legislation still in public hearings, at least four groups -including the country’s own Eskom- made attempts to weaken penalties for polluters, according to a report by climate think tank InfluenceMap. 

The mining industry was the strongest supporter of coal, as multinational companies Anglo American and South32 all participated in lobbying to water down climate legislation in South Africa, the report shows. 

In earlier discussions on the Carbon Tax Act, industry lobbyists pushed for a low tax on greenhouse gas pollution, which ultimately passed in 2019 at a rate of around an $8 per tonne of carbon dioxide. This is much lower than the $40-80 per tonne recommended by the climate think tank Carbon Market Watch to achieve the goals of the Paris Agreement. 

At the time, The Minerals Council South Africa, which represents mining companies employing 450,000 people, said the tax was “a wrong method at the wrong time”. 

Industry executives hold similar views on the role of coal in the upcoming years. Mike Teke, CEO of Seriti Resources, owner of six coal mines around Emalahleni that supply Eskom, defended the expansion of their coal business while building renewables. 

One of its subsidiaries, Seriti Green, announced in February 2023 the development of a 155MW wind farm due to come online by 2025. The project, however, will serve to power about 75% of the electricity required in its own coal mines. 

“We’re building wind turbines. However, I want to be clear, we will continue building our coal business at the same time as building our renewables business,” he told Oxpeckers and Climate Home News. 

Mike Tete, CEO of Seriti Resources, plans to expand coal mining activities and power it with renewables.

Uncertain investments 

Lobbying for coal interests has a long history in South Africa, according to Wikus Kruger, research lead and lecturer on power-sector investment in sub-Saharan Africa at the Power Futures Lab, based at the University of Cape Town’s Graduate School of Business. 

The “minerals-energy complex”, a powerful grouping of business and political leaders related to the coal sector, has influenced decision making since the apartheid time, Kruger said. Today, it has kept an active pushback against the coal phase-out. 

By 2018, South Africa’s public electricity company Eskom had aligned with different political currents, but “coal mining for electricity generation continued to dominate”, according to research published by Oxford University Press. 

Policy certainty is essential for investors to pour money into green energy in South Africa, climate futures analyst Nicholas King told Oxpeckers and Climate Home. But recent events have kept policy decisions far from certain in the country. 

South Africa’s ageing coal-fired power plant fleet has caused an energy crisis all over the country, with blackouts more than tripling in 2022 compared to 2021.

As a result, president Cyril Ramaphosa said in a statement to the nation that he would consider delaying coal-fired power plant decommissions. Rich donor countries, on their part, said they were “understanding” of the crisis but warned about the risk of backsliding on the energy transition. 

“You need a clear picture… a roadmap,” King said. “No one’s going to want to invest if the old and really malfunctioning coal-fired power stations are going to have their length of life extended.”

Uncertainty on renewable retraining frightens South Africa’s coal communities

Still committed 

In spite of the current energy crisis and pressures from the coal sector, the government remains committed to South Africa’s decarbonisation targets, said project management unit head Rudi Dicks.

Dicks said any revision to the decommissioning schedule would be informed by a comparison of the costs of refurbishing older coal-fired power stations with the cost of investing in its replacements, including renewables, batteries and gas.

Still, extending the coal-fired power plants’ lives, as well as building new coal-fired power plants, are options being pushed by government factions, specifically in the Department of Mineral Resources and Energy, which has a strong interest in coal, said Brett Cohen, climate and energy consultant at the Department of Chemistry at the University of Cape Town. 

“The bulk of the pro (coal) lobby is within Mpumalanga; it is people who are concerned about job losses and economic impact,” Cohen said. “There hasn’t been a clear policy signal from the government for renewables, that’s why it has been difficult to invest in renewables in South Africa.” 

King, on his part, said clarity will be key to guarantee renewable growth in the country. “The longer we resist the changes, the more it’s going to be problematic for us to attract that investment, and investors will go to countries that are willing to transition,” he concluded.    

This story was published in partnership between Oxpeckers Investigative Environmental Journalism and Climate Home News, and produced with the support of the Pulitzer Center 

The post South Africa’s coal lobby is resisting a green transition appeared first on Climate Home News.

There is “abundant proof” current head Jose Miguel Linares, who took up his post in 2013 after serving as vice-president of legal, and Augusto Jimenez, who headed the company’s Colombia operations between 1990 and 2012, conspired to finance a paramilitary group, the prosecutor said in a statement.

“Linares Martinez and Jimenez Mejia, between 1996 and 2001, increased the value of a food provision contract with a provider company to obtain additional resources and use them to cover previously-agreed illegal obligations with…the United Self-Defense Forces of Colombia (AUC),” the statement said.

The effort was a bid to protect assets and ensure the free operation of Drummond’s mine in Cesar province, the statement added.

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Drummond rejected the accusations, saying in its own statement that they are the product of “a cartel of false witnesses.”

“These accusations are not backed up with credible proof and are based, principally, on false declarations by convicted criminals, who receive payments for testimony,” the company said, without providing further details.

The company is confident evidence will demonstrate Linares’ and Jimenez’s innocence, it added.

The case is a “moral triumph,” said Joris van de Sandt of Dutch non-governmental organization PAX, which has campaigned to raise awareness over alleged wrongdoings by Drummond, which the company has always denied.

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Drummond – Colombia’s largest producer of thermal coal – has three mining contracts in the country and also holds a port concession on the Caribbean coast.

It expects to export around 30 million tons of coal this year, Linares said this week.

Paramilitary groups emerged in the 1980s, funded by landowners, merchants and drug traffickers to defend themselves from attacks by leftist guerrillas.

Paramilitary groups – accused of murders, rapes, torture and other crimes – demobilised under a peace deal in the 2000s, though many members later formed crime gangs.

Colombia is one of the most dangerous countries in the world for environmental activists, with at least 33 dying in 2021, according to Global Witness’s research.

Last year, Colombian anti-fracking activist Yuvelis Natalia Morales told Climate Home that unidentifiable armed men had held a gun to her head, resulting in her fleeing abroad.

The post Colombia accuses Drummond coal mining exec of funding paramilitary group appeared first on Climate Home News.

Nelly Sigudla, a qualified fire watcher and part-time control room operator at Duvha power station in Mpumalanga, South Africa’s energy capital, worries for her future, when her main source of income gets unplugged.

The mother of four children lives in Benicon Park, an informal settlement next to the coal-fired power station, which is scheduled to be decommissioned by Eskom – South Africa’s public electricity company – between 2031 and 2034.

Like many employees in the coal-mining industry, Sigudla fears her qualifications won’t be enough in the near future, when renewables take over coal as South Africa’s primary source of new energy, risking becoming unemployable.

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The country, which depends on coal for about 85% of its electricity, is home to one of the largest energy experiments in the world: an $8.5-billion deal with a group of rich nations – including the United States, United Kingdom and the European Union – to transition towards renewable energy.

For solar panels and wind turbines to operate, South Africa will have to redirect coal workers towards new jobs in the renewable energy sector, such as construction, electrical engineering and information technology.

But an investigation by Oxpeckers Investigative Environmental Journalism and Climate Home News found a major skills gap in coal-reliant communities and a lack of clarity on how funds for reskilling will be implemented.

Sigudla said the transition to green energy sources in Mpumalanga is difficult to welcome. From a community perspective it could bring even more poverty. The region has a soaring unemployment rate of 38%, and more than 100,000 jobs depend on coal.

“When the renewable sector kicks in, what fire am I going to watch?” Sigudha asks. “No one has come to the communities to tell us about new skills programmes that we can follow to acquire skills that will be needed in future.”

Reskilling programmes

The Just Energy Transition Investment Plan (JET-IP), a document that is guiding South Africa’s move to renewables, includes an investment of nearly R2.7-billion ($151 million) for reskilling programmes across the country.

In Mpumalanga, R750-million ($42 million) is allocated to “investing in youth” – including education, training, work experience and placements – and R5.6-billion ($310 million) to “caring for coal workers”, which includes re-skilling, redeployment, placement and temporary income support.

Funds would not only come from the JET partnership, but also from government budgets, venture capital and multilateral banks.

According to the JET-IP, the government plans to set up a national skills hub to advise on reskilling needs, and R1,6-billion ($89 million) will be allocated to creating pilot training centres known as “skills development zones” in Mpumalanga, Eastern Cape and Northern Cape provinces.

These pilot zones will be run by technical colleges and support the development of new skills and courses, aiming to “ enhance the employability of graduates”, says the JET-IP.

One of the options to set up facilities for the training centres is to use old decommissioned coal plants. This was one of the options for the Komati power station, the first one to shut down, in October 2022, according to a recently published report by environmental justice organisation GroundWork.

But details about how these training centres would actually become operational are scarce.

Development zones

Blessing Manale, spokesperson for the Presidential Climate Commission (PCC), an independent multi-stakeholder body established by President Cyril Ramaphosa to oversee the country’s transition, was unable to indicate when the skills development zones will start operations.

Additionally, he acknowledged that skills development is severely under-prioritised, adding “all stakeholder groups have raised this as a fundamental weakness in the JET-IP”.

“In the PCC’s view, much work needs to be done, both to quantify the needs for skills development, and to upskill the workforce and new entrants – in particular youth and young women,” Manale said.

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Manale added the transformation of technical and vocational colleges, typically aimed at adults looking for new technical skills, is “fundamental”. The PCC is rolling out a new programme on skills for the energy transition along with the departments of education and energy, he said. 

But there needs to be more clarity on the skills needed for the decommissioning of coal-fired plants, he said.

“This gives rise to questions around who will actually provide the training required for upskilling workers in the coal value chain, design curricula for educational institutions where skills development will take place, and how this can be funded,” Manale told Oxpeckers.

For workers in the coal industry such as Nelly Sigudla (above), the transition to green energy sources in Mpumalanga is difficult to welcome. (Photo: Ashraf Hendriks)

Vocational training

Mpumalanga has three technical and vocational education and training (TVET) colleges that fall under the department of higher education and training (DHET). They focus on “preparing students to become functional workers in a skilled trade”.

These colleges, based in Ehlanzeni, Gert Sibande and Nkangala districts, provide practical skills training for the mining and fossil fuel industries, among other courses. At the start of the year, the department reported that more than 500,000 students had enrolled at TVET colleges countrywide.

Oxpeckers and Climate Home reached out via email to all three TVET colleges, as well as the DHET and several other tertiary institutions in the province, to understand how skills development courses currently on offer could be applicable to the green energy sector. Similar questions were also sent to Eskom’s Academy of Learning and the South African Renewable Energy Technology Centre. Despite follow-up phone calls, no responses were received at the time of publication.

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The curricula of the TVET colleges and other educational facilities needs to change to achieve the energy transition, said professor Victor Munnik, co-author of the Contested Transition report recently released by GroundWork.

Training and reskilling for renewables must be “fit for purpose”, he said. “It should be aimed at a society that lives on renewable energy and understands how it works. There are specific specialised skills involved; for example, for the grid to become a smart grid it has to integrate a lot of IT technologies.”

Changes in the education system need to include school courses “to prepare young people not just to work in the new economy but to actively shape it and be part of it”, Munnik said.

Wendy Poulton, secretary general of the South African National Energy Association, added that there is a scarcity of specialist technical and managerial skills in the renewable energy sector. “This will require the education, training and upskilling of engineers and technicians to shift into renewables,” she said.

Happy Sithole, NUM health and safety chairperson in the Highveld region and an Eskom shop steward, says he has no knowledge of skills development zones in Mpumalanga. (Photo: Ashraf Hendriks)

Union concerns

The regional chairperson of National Union of Mineworkers (NUM) in the Mpumalanga Highveld region, Malekutu Motubatse, is concerned that the current courses offered at TVET colleges and other education facilities still produce learners that will be unemployed in the near future.

Next to each power station there is a coal mine that is used for the purpose of providing coal to the power station, he said. “So the reskilling should be a reskilling of everyone. If the government is talking about reskilling, who is going to be reskilled, Eskom employees or mine employees? Let’s assume that it talks to Eskom employees, then where does it leave the coal mine workers?”

Happy Sithole, NUM health and safety chairperson in the Highveld region and an Eskom shop steward, believes not many artisanal coal miners - who conduct small scale mining - will be employed in the renewables sector.

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“We are talking about artisans, a job that pays well. If you change from coal to renewables, what’s going to happen to them?”

Sithole said he has no knowledge of skills development zones in Mpumalanga: “We find ourselves trying to understand what this is, because as NUM we have not seen any development.”

NUM is also unaware of a training facility that is supposed to be set up at Komati power station, which was decommissioned in October 2022 and is punted as a model for repurposing, Sithole said.

“We have not heard of Komati becoming a training facility. All we know about Komati is that there is intent to demolish it. There’s a lot of information that needs to be cleared up, and it’s difficult to get answers,” he said.

Gaylor Montmasson-Clair, a senior economist at Trade & Industrial Policy Strategies (TIPS), an economic research institution, said Eskom’s skilled workforce has a higher chance of finding alternative jobs in other industries, such as electricians, for example.

But coal miners might not have the same luck. “To be blunt, we must stop the delusion that the bulk of the people who are employed in coal mining are going to be employed in renewable energy. That narrative just makes no sense,” Montmasson-Clair said.

Duvha power station, located in Mpumalanga, South Africa, is scheduled to be decommissioned between 2031 and 2034. (Photo: Ashraf Hendricks)

Construction jobs

Peter Venn, chief executive of Seriti Green, said the transition will create more jobs in the construction sector in the coming years. “We see a positive job growth in the renewable space for the next 10 years through the construction period,” he said.

Seriti Green is an offshoot of a mining company and will soon begin construction on South Africa’s largest wind farm in Mpumalanga, with power supply due to come online by 2025.

With Seriti being on both sides of the transition from coal mining to renewable energy supply, Venn emphasises the importance of training programmes for the skills required in the renewable sector.

“The Cape Peninsula University has partnered with Komati power station and Eskom to deliver skills in Mpumalanga. And there are other organisations offering significant renewable energy skills,” he said.

“Renewables require across-the-spectrum skills. All the back-office skills are required, civil and electrical skills are required; it goes into IT, security, data analytics, preventative maintenance,” Venn said.

Middelburg resident Emanuel Marutle says the current education system is not even able to provide skills for learners to work in the coal-mining sector, making a transition towards renewables even more difficult.  (Photo: Ashraf Hendriks)

Young workers

According to the PCC, workers in the coal-mining sector are relatively young, with a median age of 38 years. About 90% of those employed in Mpumalanga are semi-skilled (74%), or low-skilled (17%) workers.

The urgency for the skills they will need to diversify is heightened by the fact that transition planning is developing in the context of already high unemployment, poverty and inequality, the PCC says.

“These dynamics make skills diversification more complex as the just transition ought to manage job losses and create employment opportunities in a country with an unemployment rate of 33.9%,” said Manale.

Emanuel Marutle, a resident of the coal fields in Middelburg, told Oxpeckers he is worried the education system in Mpumalanga doesn’t have the resources to help affected community members gain practical skills to weather the transition.

“The current education system is not even able to provide skills for learners to work in the coal-mining sector, so how will it equip people with the skills needed in the renewables sector?”

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Marutle said during a community consultation about the transition held “by government people from Johannesburg” in 2022, locals were promised that people from their municipality would be taken to undergo training for the renewable sector. This has not happened, he said.

Given Masina, another local and a member of the Khuthala environmental group, said he hasn’t heard anything about any reskilling, training, or skills development in Mpumalanga.

“Our kids are studying in the fields of coal, but coal is dying. People will be left without knowing what they can do,” he said. “If people are skilled, they can transfer skills to other people in the communities so that they have chances of being employed.”

This investigation by Climate Home News and Oxpeckers Investigative Environmental Journalism was produced with the support of the Pulitzer Center, and is part of a series on South Africa's Renewables Revolution.

The post Uncertainty on renewable retraining frightens South Africa’s coal communities appeared first on Climate Home News.

Concerns were raised because Beijing rapidly accelerated plans for new coal power plants in the second half of last year in a bid to increase its energy security.

According to a report by think-tank E3G, published today, China’s coal project pipeline grew by nearly 50% in the last six months of 2022 taking the total to 250GW. It says developments in China diverge sharply from the rest of the world, where combined coal power plans shrank to 97GW over the same period – the lowest level in modern history.

China is still a global leader in the rollout of renewable energy. The country is adding clean energy projects to the grid almost as fast as the rest of the world combined.

But Leo Roberts from E3G’s coal transition programme believes China’s coal expansion is a “direct threat” to the Paris Agreement goal.

Increasing scale of the challenge

In 2015, nations agreed to pursue efforts to limit global temperature increase to 1.5°C above pre-industrial levels. Crossing that threshold would make climate impacts increasingly harmful to people and the entire planet.

The International Energy Agency (IEA) says no new unabated coal-fired power stations can be built if the world wants to reach that goal.

“Every new coal power station that comes online increases the scale of the challenge to decarbonise the global economy,” Roberts told Climate Home News. “China’s coal boom is actually undermining significant progress away from coal in all other parts of the world.”

The rapid expansion of China’s coal power plans comes as Beijing seeks to strengthen its energy security. Geopolitical tensions affecting global energy prices and domestic supply issues have made policymakers reconsider previous intentions.

After blackouts, China’s green goals take back seat to energy security

At a climate summit in April 2021, China’s president Xi Jinping vowed the country would “strictly control coal-fired power generation projects, and strictly limit the increase in coal consumption”.

At the time his words mirrored the central government’s successful attempts to curb new coal projects. E3G analysis shows that new coal power proposals in China collapsed by 75% between 2015 and July 2022.

China’s rapid U-turn

The recent coal boom has reversed this trend and China is now a clear international outlier. It currently accounts for 72% of total global planned coal capacity, with India, Turkey and Indonesia following far behind.

The aim of China’s coal push is to prevent a repeat of the power outages that affected homes and industries last year. Heatwaves increased electricity demand for cooling, while drying up water reservoirs necessary for hydropower generation in the country’s southwestern provinces.

Meteorological agencies predict another round of record high temperatures and more droughts this year.

Preventing power outages

Many of the new coal-fired power plants are expected to meet peak summer demand driven by energy-hungry air conditioners, which last year resulted in the highest recorded momentary load.

Lauri Myllyvirta, a lead analyst at the Centre for Research on Energy and Clean Air (CREA), says solar energy is able to tackle daytime power needs, but meeting night-time peak demand requires a more nuanced approach.

Still, he believes betting on coal is a suboptimal and costly strategy. “Building coal power capacity to cover peak demand just some days or weeks per year is very expensive. There is still a lot of potential to deal with peak loads with better grid management."

E3G’s Roberts said it looks as if the Chinese government’s claim that it is new building coal capacity to support peak demand is being used as a cover to push through projects. “The reality is that most of the permits handed to new coal power stations would allow them to provide baseload power, which slows down the transition from coal-to-clean."

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The study published in the journal Nature found that a typical 1.5C energy transition model expects nations like China, India and South Africa to get off coal faster than any country has ever got off any energy source before.

But these models ask for much slower reductions in oil and gas – fuels that tend to be produced and used more in wealthy countries.

The study’s lead author Greg Muttitt told Climate Home that these models are amplified by the Intergovernmental Panel on Climate Change’s (IPCC) scientific reports and guide decision-makers’ policies across the world.

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“The models currently are asking so much more of India and South Africa than they are of Canada and France and that’s a problem”, he said.

What are these models?

To work out how to limit global warming to 1.5C, academics make integrated assessment models (Iams). They use formulas and spreadsheets to model factors like how much forest must be saved, how quickly cars must become electric and how fast use of different fossil fuels must drop.

The IPCC takes these models and puts them in its regular reports, which are then signed-off by governments. With this stamp of approval from governments and scientists, the findings of these reports become benchmarks for decision-makers across the world.

Muttitt, who worked with University College London-based modellers on the study, said that estimates tend to be based in rich nations and to therefore have subconscious biases.

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Modellers based in the UK, he said, will be aware of the factors limiting how fast polluting vehicles can be replaced with electric ones. “You will be more sensitised to that than you will the difficulties of closing down a coal power plant in India,” he adds.

What do the models say about coal?

Last year, the IPCC published a report based on the models, concluding that to limit global warming to 1.5C coal use should fall by nearly three-quarters between 2020 and 2030 while oil and gas use goes down by around a tenth.

The modelled transition away from coal is even faster in the power system. The IPCC says coal use for electricity should fall 88% between 2020 and 2030.

Muttitt’s study compared this scenario with previous rapid energy transitions like South Korea’s move away from oil after the 1973 Opec crisis and the USA’s transition away from coal during its 2010s boom in home-grown fracked gas, but results were not realistic.

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He found that, to reach an 88% fall, coal-reliant nations like China, India and South Africa would have to move off the fossil fuel twice as fast as the previous world records, relative to the size of their energy systems.

“This raises questions about socio-political feasibility,” the study says. It adds that coal phase-out dates of 2030 for wealthy countries and 2050 for developing ones are better targets as they are “difficult but possible”.

What limits the speed of coal phase-out?

Coal tends to be dug up and burned for power in geographically concentrated areas, where the fuel happens to be abundant. The communities in these areas come to rely on coal for their local economy.

Environmentalists in South Africa’s coal heartland told Climate Home recently that coal “is the backbone of our economy” and so, despite their concern for climate change, they were wary of a rushed, unfair transition away from the fuel.

Avantika Goswami, the climate change lead at Indian think-tank the Centre for Science and Environment, said renewables must be paired with grid-scale battery storage and that “currently grid-scale battery storage can’t compete yet with coal-based power in terms of cost”.

She added that, for developing countries, borrowing money to invest in renewables is more expensive than for richer nations.

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But Pieter de Pous, head of E3G’s fossil fuel transition programme, said that emerging economies could break previous records. “Lets not rule out the [Global] South being able to go faster than anyone thinks is conceivable”, he said.

He said that Europe’s experience is there is no trade-off between a fast transition away from coal and a fair one. Spain and Portugal had phased coal out fast while looking after coal communities, he said.

IPCC author Joeri Rogelj agreed that the transition could happen faster than previous examples “because there is a fundamental difference dynamic between accidental emissions reductions in the past that happened as a side effect of societal disaster and disruption, and targeted policy driven emissions reductions that set out a positive development path over multiple decades”.

He added: “The same differences exist for the pace of technology phase-outs and therefore require careful consideration.”

What do models say about oil and gas?

If coal is phased out slower than the IPCC envisions then oil and gas will have to be phased out faster to meet the 1.5C target. Muttitt suggests oil and gas should be phased out 50% faster than the IPCC’s figures propose.

This would place more responsibility on rich nations like the US and Europe. In particular, the use of oil to power cars, trucks and ships would have to fall particularly fast.

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“The pace of oil and gas phase out is very gentle in these models,” said Muttitt, “and it’s very gentle because a lot of the work of emissions reduction is done by phasing out coal”.

Only a handful of nations have promised to stop producing oil and gas. At Cop27, a group of producers including Saudi Arabia, Iran and Russia blocked a commitment to phase out all fossil fuels.

Why are models important?

It’s hard to prove a link between these models and real-world decisions but climate policy, particulary in rich countries, has prioritised global reductions in coal use over oil and gas.

In climate talks, coal has been singled out. As Cop26 hosts, the UK said the summit was about “coal, cars, cash and trees”. At the summit, governments committed to phasing down coal use but did not mention oil or gas.

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Many big and wealthy nations, multilateral development banks and private banks ended finance for overseas coal before they ended it for oil and gas. China, Japan and South Korea all announced in 2021 they would end support for overseas coal but have yet to extend this to oil and gas.

Only a handful of nations have joined an initative, led by Denmark and Costa Rica, to end oil and gas production.

This article was updated on 20th February to include Joeri Rogelj’s comments.

The post Study: IPCC asks emerging countries to drop coal faster than rich nations did appeared first on Climate Home News.

“Coal is the heritage of this province, it is the backbone of our economy. It’s an undeniable fact,” says Philani Mngomezulu, founder of an established community-based greening project in the municipality called the Khuthala environmental group.

According to Mngomezulu, almost 80% of the more than 80,000 residents working and generating income in Ermelo are employed at Eskom and Transnet, the state-owned energy and transport companies. Camden is one of 12 coal power stations in Mpumalanga scheduled to be decommissioned in the coming years, most of them by 2035.

“As an environmental group, we are clear about the impact of coal on our environment, in particular climate change and pollution. However, as the community of Ermelo we will only be in agreement with the energy transition if it is going to impact positively on the local people,” he says.

Ermelo and other coal-mining regions in Mpumalanga province are at the frontline of South Africa’s Just Energy Transition (JET) process, which aims to repurpose coal power plants and coal-mining lands to greener energy. But coal workers are still hesitant and have said to feel left out of the country’s energy transition.

Lack of consultation

According to Mngomezulu, however, the people of Ermelo are in the dark when it comes to the transition because the government is not bringing consultations to the communities.

“We’ve been saying to the presidential climate commission [PCC] that they must come and do a proper consultation in Ermelo because people here are dependent on coal, so if we are going to shut down the power stations and any other coal mines without informing the community, that’s a bit unfair,” he said.

The PCC is a multi-stakeholder body set up by President Cyril Ramaphosa to “oversee and facilitate a just and equitable transition towards a low-emissions and climate-resilient economy” in South Africa.

Thulani Madlala, a ward councillor in the Msukaligwa municipality, says he is waiting to see how the transition will assist the local poverty-stricken people.

“We are waiting for the JET to be explained to the masses of our people on the ground. We hope that this programme doesn’t negatively affect the unemployment rate that is already here because, if that’s the case, our people are going to be against the transition,” Madlala says.

Meanwhile, Ermelo communities are living in “energy poverty: most of our informal settlements don’t have electricity, so they rely on coal, and some are able to profit from coal sales”, he says.

‘Causing havoc’

Data collated by the Oxpeckers’ #MineAlert tool shows that at least 227 government-licensed coal mines surround Ermelo. The area is also home to more than 3,000 small-scale artisanal miners who contribute to the local economy, pay rent, buy clothes and provide jobs.

Given Masina says the downside of phasing out coal is that businesses such as his will have to close. He started a coal yard in Wesselton, Ermelo’s satellite township, in 2011 that sells coal to community members and he employs people from the community.

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Masina says they had not heard anything from the government about consultations with the community. “Look, if they decide to phase out coal, this means I will also have to retrench the employees I have so far employed.”

“There is no doubt that this transition is causing havoc in South Africa. At the moment, power stations are being bombed because of this transition that is not being explained properly to the people of the country,” Masina says.

In December, the government deployed troops to at least four Eskom power stations after a series of incidents of theft and sabotage.

Employment opportunities

The JET plan, released in 2022, states that more than half the youth in Mpumalanga communities are unemployed and the coal value chain decline will further narrow employment opportunities as the sector downscales.

It shows that the coal sector provides direct jobs to almost 90,000 people in mines and power plants in the province, and indirect jobs for people who provide goods and services to the coal sector, which supports a significant portion of induced jobs and other economic activities.

Power utility Eskom says the implementation of JET is envisaged to create some 300,000 jobs in the renewables value chain. “This represents a net jobs gain,” said an Eskom spokesperson in response to Oxpeckers’ questions.

Given Masina says his coal yard will have to close and retrench employees from the local community (Photo: Thabo Molelekwa)

Research by the Institute for Advanced Sustainability Studies published in 2022 indicates that in South Africa as a whole, job creation through renewables could exceed anticipated job losses in the coal sector.

However, in Mpumalanga, not all job losses in the fossil fuel sector can be replaced by clean energy jobs. Under an ambitious decarbonisation scenario, these net losses can be minimised.

The report states the two most important technologies for the energy transition in Mpumalanga will be wind and solar PV energy, which will also make the largest contributions to job creation: up to 43,000 jobs in solar PV and 28,900 jobs in wind energy by 2030.

Reskilling programmes

While people on the ground who spoke to Oxpeckers are unaware of reskilling programmes, Eskom says people employed at power stations due to be decommissioned are “being trained to obtain skills in the renewable industry so they may be able to manufacture, install and service the renewable energy components required to operate the repurposed power stations.”

“To achieve this end, and in partnership with the Cape Peninsula University of Technology’s South African Renewables Energy Technology Centre and recognised labour unions represented at Eskom, Eskom has established an accredited training centre at the Komati power station,” an Eskom spokesperson who asked not to be named said in response to Oxpeckers questions.

“Those whose skills are required at other coal-fired power stations get transferred to those stations to meet the staffing requirements there. As part of the shutdown plan, extensive socio-economic studies were conducted which included widespread consultation with all communities around the affected power stations.”

And most importantly, he said, Eskom assures all its employees that “no Eskom employee will lose their jobs because of the JET”.

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The spokesperson said employees who no longer work at Komati had either resigned, retired, or were transferred to other stations.

“Eskom plans to use its limited funding to catalyse the construction of renewables plants across the country,” the spokesperson said. “This is demonstrated by the leasing of land at Eskom power stations to allow private participants to rapidly bring online new generating capacity, inter alia.”

Unions sidelined

Michelle Cruywagen, the just transition and coal campaign manager at environmental justice NGO Groundwork, says unions set out processes for a just transition in 2018, “but the business and mining sectors didn’t really come on board in assisting with facilitating the transition, even though they are obliged to do so legally through the social and labour plans”.

“This can be coordinated through the minerals council [a mining industry employers organisation], and the unions who generally negotiate wages and retirement plans should have been leading the way forward,” she says.

Cruywagen maintains that the consequences now are that the transition is not being managed properly, and the job losses aren’t being mitigated because of a lack of management and political will, which puts communities in a vulnerable position.

“It’s fine to reskill people, but employment is actually the thing that people need,” she says. “Part of what we’re pushing for is to get local government involved so that they drive the message, raise awareness and facilitate engagement on the issues of a just transition at a local level.”

Thabo Molelekwa is a freelance health and environmental journalist, and an Associate of Oxpeckers Investigative Environmental Journalism. This investigation was originally published in Oxpeckers and was supported by the African Climate Foundation’s New Economy Campaigns Hub.

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The clearing of the village in the western state of North Rhine-Westphalia was agreed between RWE and the government in a deal that allowed the energy giant to demolish Lutzerath in exchange for its faster exit from coal and saving five villages originally slated for destruction.

“This is a betrayal of present and fuure generations… Germany is one of the biggest polluters in the world and needs to be held accountable,” Thunberg said on a podium, after she marched with a cardboard sign saying in German “Luetzi stays”, using a shortened name of the village.

Climate activist Greta Thunberg takes part in a protest against the expansion of Germany’s utility RWE’s Garzweiler open-cast lignite mine to Luetzerath, in Keyenberg, Germany, January 14, 2023. REUTERS/Christian Mang

As the protesters neared the village, they were confronted by police in riot gear, and some used batons to push the protesters back.

Regional police said on Twitter it had used force to stop people from breaking through barriers and nearing the danger zone at the edge of the excavation area.

Earlier this week, police cleared out protesters from buildings they have occupied for almost two years in attempt to stop the nearby mine’s expansion.

On Saturday, only a few remained camping out in treehouses and an underground tunnel, but thousands turned up to protest against the mine, which activists say symbolises Berlin’s failing climate policy.

Police officers scuffle with activists during a protest against the expansion of Germany’s utility RWE’s Garzweiler open-cast lignite mine to Luetzerath, Germany, January 14, 2023. REUTERS/Christian Mang

Dozens of climate activists in Uganda’s capital city Kampala protested against the mine. “No more coal,” said one placard. “Not in Uganda. Not in Germany. Not anywhere”.

The president of North Rhine-Westphalia Hendrik Wüst told German radio Deutschlandfunk on Saturday that energy politics was “not always pretty” but that the coal was needed more than ever in light of the energy crisis confronting Europe’s biggest economy.

Earlier, economy Minister Robert Habeck told Spiegel on Friday that Lutzerath was the “wrong symbol” to protest against.

“It is the last place where brown coal will be mined – not a symbol for more-of-the-same, but for the final frontier.”

Germany has phased out coal production slower than other European countries (Photo: Our World in Data/ Screenshot)

But activists have said Germany should not be mining any more lignite and focus on expanding renewable energy instead.

Germany plans to stop using coal for electricity by 2030 and to become carbon-neutral by 2045, one of the earliest dates in the world.

The post Thunberg joins protest against German coal mine expansion appeared first on Climate Home News.

Japan and the US coordinated financial contributions from seven other national governments and the EU, as well as private sector partners.

The money will be spent retiring some of Indonesia’s huge, young fleet of coal-fired power stations and installing renewable energy to meet the country’s electricity demand instead.

Indonesian minister Luhut Pandjaitan announced the “just energy transition partnership” (JETP) on the sidelines of a G20 leaders summit in Bali on Tuesday.

It is a “groundbreaking model of international cooperation,” Pandjaitan told media, which would fulfill a promise to his granddaughter to “make policy that would benefit future generations”.

Fabby Tumiwa is director of the Institute for Essential Services Reform (IESR) and advised the Indonesian government on the deal. It “could help Indonesia to meet its net zero emissions goal by 2060 or sooner,” he said. “As one of the largest emitters, this means a lot to global climate efforts to limit warming to 1.5C.”

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Indonesia will aim to peak emissions from its power sector by 2030 rather than the previous target of 2037. It has raised its 2030 target for the renewable share of electricity generation from 17% to 34%.

The government will “freeze the existing pipeline” of coal-fired power plants. Those already under construction are expected to be completed, but others in early stages of development will not go ahead.

Mafalda Duarte heads the Climate Investment Funds, which supported the deal. She told Climate Home: “If we were to allow these [already operating] plants to continue their economic life, then certainly we are out of this Paris Agreement goals of 1.5[C] and even more so if they continued to develop them.”

Financial terms unclear

Roughly half the $20bn package is to come from governments: the US, Japan, UK, Canada, Denmark, the EU, Germany, France, Norway and Italy. Banks are mobilising the rest.

The joint statement between Indonesia and its partners did not reveal who was contributing what, or on what terms. It said the package includes grants, loans at both concessional and commercial rates, guarantees and technical assistance.

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The partners will continue talks on the financial terms and investment plan in the next three months.

The share of grants, as opposed to loans, is a point of contention – as with a similar deal in South Africa. In June, Tumiwa told Climate Home: “The government expects to have grants. It doesn’t really want to have a loan – for sure.”

Esther Tamara, from the Foreign Policy Community of Indonesia, told Climate Home: “Any financing is good news at this point. I am just wondering what kind of financing the JETP will be.”

She said that South Africa’s JETP “was much lauded at first but then not so much afterwards”. In both, there was “no transparency, little room for civil societies to contribute,” she added.

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As of July 2022, Indonesia had 19GW of new coal capacity under construction and 7GW in planning stages, according to data compiled by Global Energy Monitor.

The partnership agreement states that support is “contingent on no new coal power capacity for instances where timely, zero-emissions, affordable, and reliable alternatives are available”.

The $20bn is due to be invested in the next three to five years. IESR estimates the total cost of Indonesia’s energy transition at $1.2 trillion – 60 times what’s on offer here.  Duarte told Climate Home “this is a first move – a first package of support and more will be needed”.

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Over the years, there have been various vehicles for this. Loans, grants, technology and training pass from developed to developing countries directly and indirectly through multi-lateral development banks and specialist vehicles like the Green Climate Fund.

At Cop26 in Glasgow last year, a new vehicle was announced. The UK, US, France, Germany and the US announced they would provide $8.5bn to help South Africa transition from coal to clean energy.

They called this a “just energy transition partnership” (Jetp). The “just” means they aim to look after the coal workers whose jobs are under threat from the transition from coal to clean energy.

Since then, other countries have jumped on board. At the G7 summit in Germany in June, the group of seven developed economies declared their support for the concept, adding Canada and Japan to list the of potential financial backers.

The German hosts also invited Senegal, Indonesia and India along to the Bavarian summit. They, and Vietnam, then began talks with the partners on their own South-African style deals. So, as the first anniversary of the Jetp concept approaches, how are those talks going?

South Africa – Ambitious plan with stingy backing

South Africa’s Jetp got a lot of fanfare at Cop26. President Cyril Ramaphosa described it as a “watershed moment not only for our own just transition but for the world as a whole”.

Details were slow to emerge. But South Africa has been doing the legwork. On Friday, Ramaphosa unveiled a 200-page blueprint for economic transition, poverty reduction and an end to blackouts through investment in renewables, green hydrogen and electric vehicles.

This will use the $8.5bn as a catalyst, Ramaphosa said, but that “is not sufficient to meet the scale of our ambition”. After factoring in expected investments from multilateral development banks and the private sector, there is a $39bn shortfall over the next five years, he estimates.

To shore up more investments, John Kerry is proposing to finance the part of the transition by allowing banks and companies to claim carbon credits for funding emissions cuts. The idea is controversial and has divided partner countries. Kerry could make an announcement at Cop27.

The biggest concern for South Africa is taking on too much debt. Only 4% of the $8.5bn package comes as grants. The country will pay interest on the rest.

That may not matter too much if the new clean industries turn a profit and boost the economy. However social security and retraining of coal workers is not obviously a profitable enterprise – and risks falling by the wayside.

At a pre-Cop27 briefing, even South African environment minister Barbara Creecy sounded concerned. “We have to be careful of climate financing that enhances debt of developing countries”, she said.

Presenting the blueprint to his climate advisory group, Ramaphosa said he was "placing the ball firmly in the court of the international community particularly developed economy countries that have through their own industrialisation… contributed greatly to the damage of our climate”.

Indonesia - Haggling on ambition

Like South Africa, Indonesia is a coal-producing and coal-reliant emerging economy. Unlike South Africa, its coal plants are relatively new and therefore more expensive to retire early. Indonesia wants more money on better terms than South Africa got.

According to leaked diplomatic cables seen by Politico, rich countries are offering $10bn. The Jakarta-based Institute for Essential Services Reform (IESR) estimates that replacing all of Indonesia’s coal capacity with renewables will cost around $1.2 trillion by 2050. Its director Fabby Tumiwa previously told Climate Home an energy transition partnership worth $15bn would be “a fair amount”.

Tumiwa added that grants should make up more of the deal than they did with South Africa - at least 10%, he said. Replacing coal with renewables will require a lot of investment from state-owned utility Perusahaan Listrik Negara (PLN), he said, and "it is unfair if that cost [is] borne by Indonesia[n] tax payer[s], while we are not the one causing today climate crisis".

The US is co-leading on the talks with Japan. They represent the contributor group of the G7, Norway, Denmark and perhaps soon New Zealand, Politico reports.

The leaked cables reveal the partner countries want Indonesia to cancel a new 5GW coal power plant, remove coal subsidies and roll out renewables faster. IESR research suggests Indonesia could save $5.7bn in health costs by 2030 by cancelling its $1.7bn coal subsidy bill.

The Indonesian government is expected to announce the Jetp deal at the G20 summit it is hosting on the island of Bali on 15-16 November. The country is only sending a vice-president to Cop27, as president Joko Widodo stays at home.

Vietnam - Jailed activists ignored

Vietnam is a one-party state where climate activists are unable to criticise the government freely. 

While the government in Hanoi talks about coal transition to donors, it has imprisoned four leading anti-coal activists on spurious tax evasion charges. The US, Germany and others have condemned the arrests of Nguy Thi Khanh, Mai Phan Loi, Bach Hung Duong and Dang Dinh Bach. 

A spokesperson for Germany's development ministry (BMZ) told Climate Home it had raised human rights concerns with the Vietnamese government. A separate source with knowledge of these discussions, said the Germans "received significant pushback". 

The activists' freedom may not be a deal-breaker. The BMZ spokesperson told Climate Home: "With the agreement on the Jetp, we also hope to be able to send a positive signal to climate activists." 

US climate envoy John Kerry told reporters recently he is “working very hard to get Vietnam to do what is sensible regarding the transition to energy” despite the fact "some forces are fighting to keep coal". 

Jake Schmidt, of the National Resources Defense Council, told Climate Home this was a mistake. “How can you have an investment plan in a country that does not allow experts to operate and ensure that the money is well spent and delivered in the right way? Until these four experts are freed and their ability to operate is resolved I don't think a Jetp can survive in that country." 

According to leaked EU documents reported by Politico, the initial offer of around $5bn is too low to seal the deal for Vietnam. 

The EU and UK want Vietnam to peak power emissions in 2030, cancel planned new coal plants built and build out 60GW of renewable energy capacity by 2030. Vietnam hasn't responded publicly. 

Anti-coal activist Nguy Thi Khanh, winner of the prestigious Goldman Environmental Prize, is in jail on spurious tax evasion charges (Photo: Goldman Environmental Prize)

India - Early stages still

With more people and more emissions than the other Jetp nations put together, India is the biggest prize for emissions reduction. But it's Jetp negotiations are not as far advanced as for the three nations above.

There are no announcements expected at Cop27, which prime minister Narendra Modi is not scheduled to attend. There may be more progress next year when India takes over the G20 presidency from Indonesia.

Senegal - Gas a dealbreaker

Unlike the nations above, Senegal is not a major emerging economy and is not reliant on coal. One source said it was chosen because France wanted a French-speaking nation to take a lead on.

Like most African nations, Senegal's emissions are tiny. A third of its people lack access to electricity. The issue is how much and how quickly emissions grow.

Senegal's prime minister Macky Sall has been vocal about wanting to develop offshore gas deposits. He wants developed nations' help in this and has found a sympathetic ear in Germany's Olaf Scholz.

But, as a group, the partner countries have made clear to him that a Jetp will not finance any fossil fuels. Any deal will focus on renewables, so Senegal can "leapfrog" the polluting stage of development.

These talks have received less political attention and no announcements are expected at Cop27.

The post As Cop27 kicks off, where are the coal to clean deals at? appeared first on Climate Home News.

In a short statement, cabinet said the plan “outlines the investments required to achieve the decarbonisation commitments made by the government of South Africa while promoting sustainable development, and ensuring a just transition for affected workers and communities”.

The plan, expected to be published at next month’s Cop27 climate summit, follows nearly a year of negotiations between the governments of South Africa and the UK, EU, US, France and Germany, which are contributing funds.

South Africa’s president Cyril Ramaphosa has repeatedly said his government would only accept a deal that offered good terms, based on grants and concessional funding, that aligns with national development goals, including debt reduction and job creation.

Yet insiders told Climate Home News that less than 3% of the money will be delivered as grants, with the rest split between concessional and commercial loans.

International finance experts have questioned whether package offers the country better terms than it can already access on local and international markets.

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South Africa’s electricity system is the most carbon intensive in the world and depends on coal for more than 80% of its power.

The partnership struck at the Cop26 climate summit in Glasgow was intended to help South Africa create a low-carbon economy and deliver on the upper range of its 2030 climate targets.

At a time when donor countries were failing to deliver on their climate finance promises, including to collectively mobilise $100bn a year by 2020, the package was hailed as a model for emerging economies to go green.

But participating governments have been slow to reveal who is contributing what and how it will be spent.

“The whole world is watching to see if the money is actually mobilised in South Africa. It’s extremely important that donors follow through with their commitments,” said Leo Roberts, of think tank E3G’s coal transition team.

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The investment plan will focus on the electricity sector, electric vehicle manufacturing and development of green hydrogen.

It is expected to cover the closure and repurposing of coal-fired power plants by state utility Eskom, expansion of the transmission network and social protection and retraining for workers who lose their jobs.

Campaigners are worried a skew towards commercial loans will add to South Africa’s debt burden and leave workers behind. They have repeatedly called for more transparency in the process.

While the private sector is likely to support investments in renewable energy, other activities such as reskilling coal workers need public finance – largely in the form of grants.

“The terms have to be fair finance. They have to reduce the debt load,” Saliem Fakir, executive director of the African Climate Foundation, told Climate Home.

Indonesia is learning lessons from South Africa’s tough energy transition deal talks

For Roberts, of E3G, the lack of transparency led to a misleading idea that the partnership was a “new climate finance paradigm”.

“It is a diplomatic and political process to bring countries and stakeholders together at a table for discussion and to use an amount of public finance to leverage private finance. And that is ground-breaking. The price tag was a distraction but was needed to get everyone to the table,” he said.

Fakir said that process had the potential to create “a big shift” in South Africa. “It allows sovereign ownership of a process and arrangements for much larger-scale funding,” he said.

The post South Africa approves $8.5bn energy transition investment plan appeared first on Climate Home News.

AGL, the country’s biggest coal generator and biggest polluter, has been forced to abandon its ill-considered plans to split in two and keep burning coal for another two decades and more. And it has been forced to do so by shareholder activism.

The fact that coal has been such a touch pad of political debate in the past decade makes this stunning victory by the activist billionaire Mike Cannon-Brookes even more remarkable.

For one, it shows that resistance to the green energy transition and science-based climate targets is moving from dodgy back-room political deals and street-based protests, to the plain daylight of the boardroom and financial markets.

Australia now has two of the world’s most powerful and deep-pocketed green energy activists in Cannon-Brookes, the third richest person in the country, and Andrew Forrest, the iron ore billionaire who is the second richest person in the country, and who is making a huge push into green hydrogen and green ammonia.

It also has a super industry with trillions of dollars of investment to manage, and a keen awareness that fossil fuel assets are going to be stranded and worthless within a decade or two. The shift is on.

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Cannon-Brookes and Forrest are already working together on what will be the world’s biggest solar plant and battery storage facility, the $30 billion Sun Cable project in the Northern Territory. And they are both damning in their assessment of those who propose new fossil fuel projects.

Yes, we still have conservative politicians, media and “think tanks”, cheered on by Australia’s richest person Gina Rinehart from the sidelines, still prosecuting the case for coal, and smearing their faces in coal dust, feigning interest in the future of the coal industry workers.

But the federal election, barely a week old, amplifies the green energy shift. At least 55% of people voted for stronger climate action, and at least one quarter for a lot more than that – the supporters of the Teals and the Greens demand science-based targets, and to act on them.

It’s likely that AGL saw the writing on the wall from the election result, and realised it was kidding itself if it thought it could keep on burning brown coal up to 2045 and retain customers at the same time.

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The existing board – many gas and oil veterans – doesn’t seem interested in managing an accelerated transition, so they are heading for the exit.

There are still many big questions to be answered about how this plays out, mostly relating to the speed and extent of the transition that AGL will be able to execute.

The Australian Energy Market Operator has outlined a 20 year blueprint that factors in 80% renewables by 2030, no brown coal generators by 2032, and very few black coal generators by that time. It is very likely to accelerate that scenario in coming years, possibly to a complete exit from coal by 2035, or earlier.

But it is one thing to model this path, and another to execute. So much depends on the rules and the regulations of the market – which everyone knows are not fit for purpose, but which are taking an age to re-write. And there are other important issues, including technology integration, social licence for new projects, and transmission in particular, and of course supply chains.

David Leitch, principal of ITK and co-host of RenewEconomy’s popular Energy Insiders podcast, says the change of management at AGL will be welcomed.

He believes that AGL may try and seek a negotiated bid from Grok Ventures, the Cannon-Brookes investment vehicle. It will be interesting to see whether funds management giant Brookfield rejoins Grok in such a venture and a joint bid.

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Much about the future of AGL’s Loy Yang A brown coal generator, Leitch says, will depend on the attitude of the Victorian government, which has already privately negotiated a new closure date for the Yallourn brown coal generator in the Latrobe Valley, the details of which have been kept secret.

Yallourn was originally scheduled to close in 2032, and it will now close in 2028. It is possible it might have closed even earlier without a state government agreement to support it in troubled times, and when the sun did shine and the wind did blow, but we don’t know.

This is the big question for the green energy transition. We do know, from experience from the sudden exit of Hazelwood, and the drawn out saga over Liddell, that coal closures must be preceded by a sufficient amount of wind, solar and dispatchable storage built beforehand. That’s easier said than done.

NSW has implemented a plan to do just that, while assuming that all its remaining five coal generators could be gone within a decade. Victoria has a less well-defined plan, but its second big renewables option this year and its big new push into offshore wind shows that it knows it must build before it closes.

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As it stands, only the Labor governments in Queensland, Western Australia and the Northern Territory do not have credible plans to move beyond 50% renewables in their respective grids, or even reach that target. It is possible that the massive push into green hydrogen could solve the problem for them, but they need a transition plan for their existing workers.

Cannon-Brookes, meanwhile, can help prepare AGL for the green energy transition, but he will need to work with and count on others – regulators, rule makers, developers, suppliers, financiers, state and federal governments – to ensure the infrastructure is in place to meet those climate targets.

But that is what is so exciting about the AGL situation. The transition has claimed nearly as many AGL CEOs (Andy Vesey, Brett Redman and now Graeme Hunt), as it has claimed Australian prime ministers (Rudd, Gillard, Abbott, Turnbull and Morrison).

Now, however, we have a federal government with a more ambitious policy (43% emissions reduction and 82% renewables by 2030), and a very big cross-bench in both houses that will be pushing them to do much more, especially on economy-wide emissions. And a public that wants change and is cheering it on.

This article was produced by RenewEconomy and republished under a content-sharing agreement.

The post Billionnaire activist forces Australia’s biggest polluter into climate-friendly U-turn appeared first on Climate Home News.

Grok Ventures, the private investment firm of Cannon-Brookes and his wife Annie, hired brokers to stand in the market late Monday to snap up an 11.28% voting stake, which may be enough to thwart the demerger at the upcoming shareholder meeting in June.

Of all the things that have and will be said about Cannon-Brookes and his landmark siege of AGL, the one that seems to get under his skin the most is the claim that he is the person responsible for the early closure of Australia’s coal generators.

It’s an attack line that is readily deployed by fossil fuel lobbyists and Coalition conservatives, if you’ll excuse the tautology, because there is nothing so easy as throwing darts at someone when you are trying to hide a complete stuff up.

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It fits with the rhetoric that it is the inner city elites that are meddling with the futures of coal industry employees, not global economic, technology and environmental factors. And it annoys the heck out of Cannon-Brookes.

“The thing I push back on is people say like, ‘Oh, Mike wants to shut down the plants’,” Cannon-Brookes told RenewEconomy in an interview earlier this week.

“I’m like, let’s be clear here: These plants are shutting down.

“That makes me want to question how we do that, how we do it in a way that keeps prices down, how we do it in a way that values the workers that work there and doesn’t just throw them on the street, how we do it in a way that can be financed and managed to transition in a more stable sense.”

Cannon-Brookes says the last coal unit should be closed by 2035 at the latest, and big efforts made to ensure that the replacement capacity – renewables and storage – is delivered by then.

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“There’s a number of reasons we need to get it done,” Cannon-Brookes says.

“Certainly the climate science would say that it needs to be done far more rapidly than the company’s current closure date of 2045. And the financiers would say it needs to be happened far more rapidly than that.

“Find me a model outside of AGL that shows that these plants are in any way able to be run in 2045. There is also the case that… attracting capital requires you nowadays to have a plan that is somewhat aligned to various global climate agreements.

“That would necessitate, in my understanding, 2035 is probably the outside date and you need a really credible plan to say that that’s the last day, when the last unit of the last coal plant will be shut down.”

AGL paints this an extreme position. But it’s not got many supporters of that view.

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After all, the NSW Coalition government is working on the assumption that all of the state’s black coal generators (including AGL’s Bayswater) will be closed in a decade, which is why it is working on a renewable infrastructure plan that will likely turn out to be one of the most significant and rapid transitions in the western world.

And the Australian Energy Market Operator’s latest planning document, known as the Integrated System Plan, assumes that all brown coal generators (including AGL’s Loy Yang A) will also be gone within a decade.

It’s important to note that AEMO’s scenario planning is endorsed by the overwhelming majority of the energy industry, and a growing number believe the transition will – and must – be even quicker than that.

But not AGL. Its business plan assumes Loy Yang A will keep generating, and polluting, for another 13 years, until 2045. It wants to split the business into two to manage the transition at its own speed.

Cannon-Brookes says this position is completely untenable, given what is at stake for employees, the environment and the future of the company, and has vowed to stop the company split.

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It has now turned into a bitter fight. Cannon-Brookes told RenewEconomy earlier this week – a day after launching his market raid – that he was “sick of them [the AGL board] fucking it up.”

AGL retorted on Thursday by accusing the Cannon-Brookes team of making “false claims”, including the observation that AGL has made no direct investment in renewables over the last five years.

AGL says it has invested $4.8 billion over the last two decades in renewables. The irony is that while that may be true, it doesn’t mean that Cannon-Brookes’ claim is false.

The argument that AGL has made no direct investment in renewables in the last five years is supported in the very same document that the company used to attack Cannon-Brookes. As this map below reveals, all the latest projects have been funded by “third parties”.

Source: AGL. Click to expand.

Despite this description, AGL insists it is “direct”, because of has a 20% interest in PowAR and its $357.6 million investment to fund its share of PowAR’s acquisition of Tilt’s Renewables’ Australian business.

But this dispute over direct and indirect investment misses the point.

The central motivation of Cannon-Brookes’ tilts at AGL – first in the rejected joint offers made by his private company Grok Ventures and Brookfield, and now through the on market raid – is about the speed of AGL’s transition.

He says it’s way too slow.

AGL, let’s remember, is the biggest generator of coal in Australia and the biggest single greenhouse polluter in the country, and Cannon-Brookes says its strategy is in no way aligned with a 1.5C or even a 2C target.

A decade ago, AGL’s then CEO Michael Fraser justified his eye boggling investment in coal generators by saying it would provide the cash flow to invest in renewables. Let’s burn coal so we can build more renewables, he argued at the time.

It didn’t sound right then and it doesn’t now. (Bizarrely, Origin Energy’s Frank Calabria is using a similar argument to justify the company’s massive gas investments, even though it has chosen to fast track the closure of its remaining coal generator at Eraring).

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And in AGL’s case, it hasn’t turned out the way Fraser suggested it would. He was succeeded by American Andy Vesey, who tried to change the colour of the business plan back to green but got hounded out of the job when he announced the closure of Liddell.

AGL claims to have invested in 2.3GW of renewables in the past 20 years, but given the time-frame, the size of the Australian market and its dominant position, that’s not really a heck of a lot. It has been more interested in rewarding shareholders with its profits from coal.

Now AGL, according to this week’s presentation, is saying it will invest 3GW in renewables and flexible capacity by 2030. Again, that doesn’t come close to what’s likely needed to allow an early closure of its remaining coal generators.

It’s an important point because AGL is suggesting that 2045 is the last possible date for closure of Loy Yang A, not the actual target date. And it is suggesting that this could be brought forward if enough renewable capacity can be built instead.

That sounds a lot like Cannon-Brookes’ plan. The big difference is over the speed of that investment and the transition, and Cannon-Brookes’ contention that this is best done by AGL as a single entity rather than split in two.

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Cannon-Brookes also points to the contradictory messages sent out by AGL over Liddell, the ageing, clapped out generator that will close its last unit next year, and Bayswater, located right next door that AGL wants to run for at least another decade.

“It boggles the mind that in Liddell, we’re going to make this wonderful green hub with industrial facilities and batteries and all this stuff, we’re using the land and the assets and stuff, but at Bayswater they say we can’t do that, it’s way too hard,” Cannon-Brookes says.

“I’m like, hang on, are they fundamentally different? Explain to me the fundamental difference between Liddell and Bayswater. There isn’t one. It’s bullshit. It’s entirely possible to be done. So you’ve just got to go out and do it.”

The difference between Cannon-Brookes and the multiple others who think that way is the fact that he has the resources, and is willing, to lay $650 million on the table to bring the issue to a head.

That’s a big change from the Twitter exchange with Elon Musk that led to the construction of the Tesla big battery in South Australia, or his social media campaign against Scott Morrison’s “fair dinkum” power dismissal of renewable energy.

This is an all in confrontation with a bastion of corporate Australia and one of the most powerful and influential companies in the country. There is much at stake, not just for AGL, but for the rest of the fossil fuel industry, and the country for that matter.

“It’s not philanthropic. It’s not a charitable exercise,” Cannon-Brookes says. But it does mark one of the key moments in Australia’s green energy transition. And the world is watching.

The content of this article was produced by RenewEconomy and republished under a content sharing agreement.

The post How a tech billionaire is forcing Australia’s coal die-hards to face the future appeared first on Climate Home News.

The project uses methane released during the coal mining operation to generate 120MW of electricity. Since 60% of this coal gas has a concentration of 3-8% methane, it makes these sort of initiatives profitable.

“The challenge is to deal with the remaining 40% of low methane concentration coal gas,” said Yang Fuqiang, a senior researcher at Climate Change and Energy Transition Programme at Peking University in Beijing.

China’s energy sector, driven by its coal operations, accounted for a fifth of total methane emissions from the global energy sector last year – making it, by far, the largest methane emitter.

The government has introduced strong policies to prevent the direct release of methane into the atmosphere. But it is struggling to motivate coal mining giants to initiate methane mitigation projects.

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In 2008, China made it mandatory for coal mining companies to capture and utilise coal mine methane above 30% concentration.

Companies that cannot capture high-density methane from coal have to flare the gas to prevent its release into the atmosphere. The government further introduced incentives for methane recovery.

But industry insiders say that a lack of monitoring of methane emissions coupled with the high cost of capture technologies deter the development of more methane-cutting projects.

Detecting methane emissions requires tracking on the ground and from the sky using drones, planes and satellites. These monitoring systems alone are costly and need huge investment.

“The data uncertainty of methane emissions is a long-existing problem,” said Ran Ze, senior manager at Environmental Defense Fund, China (EDF). “It’s crucial to enhance monitoring, reporting and verification (MRV) to detect the exact status of methane emissions.”

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The US-China joint declaration announced at Cop26 in Glasgow, UK and China’s pledge to become carbon neutral by 2060 have prompted policymakers to bolster efforts to capture methane and increase its share in the country’s energy mix.

Cutting methane emissions from the energy sector, which has a warming potential 80 times that of carbon dioxide, is increasingly seen as a quick win. At Cop26, more than 108 countries signed up to reduce its emissions under an initiative launched jointly by the US and the EU.

China stayed away from the initiative but, in its joint declaration with the US, committed to work towards limiting its methane emissions.

According to official data from 2014, the country’s energy sector contributed 24.7 million tonnes or 45% of national methane emissions. Coal mines alone were responsible for around 38% of emissions – unlike in the US and the EU where a majority of methane emissions come from gas pipelines.

“If China wants to tap the potential of methane and curb its emissions, then undoubtedly coal mines are a priority area,” said Yang.

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China is expected to release a national action plan for cutting methane emissions ahead of the Cop27 climate talks in Sharm el-Sheikh, Egypt, in November.

The success of China’s methane emission reduction policies hinges on a comprehensive approach.

Besides monitoring, coal mining companies will need cost-effective technologies for methane mitigation, according to EDF. There are ways to recover coal mine methane with a concentration as low as 0.5%, but they are expensive.

And with China planning to drastically cut down coal extraction as a part of its pledge to become carbon neutral by 2060, mining companies only have 38 years to recover their cost from investments.

While the government is likely to invest in methane monitoring, reporting and verification, mining companies will face the uphill task of finding low-cost methane mitigation technology.

“Methane concentration varies in coal mines here,” said Meian Chen, programme director at innovative Green Development Program, Beijing.  “For this, there will be a need for a tailored approach, using cost-effective technologies and policy support, to capture methane from these mines.”

The post China’s coal miners face a challenge to capture leaked methane appeared first on Climate Home News.

Could this signal a break with Tokyo’s coal-friendly policies? That seems unlikely given its track record of using loopholes and greenwashing to circumvent global efforts to end coal. While other wealthy countries have slowly been transitioning away from coal, Japan has continued its support for coal power at home and abroad.

Japan is the second largest funder of coal power projects in other countries, after China. It justifies this funding by deceptively framing it as a contribution to climate change mitigation, arguing that Japanese coal technology is less polluting than conventional coal technology. The government therefore supports the export of Japanese “world-leading” coal power plants to developing countries. This policy is misleadingly described as “in line with the Paris Agreement and aimed at leading global decarbonization efforts”. 

Strong international pushback has led to some positive developments. The Japan Bank for International Cooperation announced in 2020 that it “will no longer accept loan applications for coal-fired power generation projects” and some Japanese-funded projects have been cancelled. Nonetheless, a recent study found that the world’s three biggest lenders to the coal industry were all Japanese banks. 

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In June of 2021, G7 countries promised to make efforts to end coal “as soon as possible” and end “almost” all direct government support for the fossil fuel energy sector overseas. According to someone involved in preparing the G7 statement, it was mainly on Japan’s insistence that such enervating qualifiers were inserted, weakening the message and enabling prolonged coal use.

Japan’s Ministry of Economy Trade and Industry (METI) has stated that Japan intends to keep its coal plants but will try to “decrease the [coal] share as much as possible”. However, an unnamed METI official told the Asahi newspaper that compromising on the coal share of Japan’s energy mix was “out of the question”. This means the government has no intention to improve its unambitious Basic Energy Plan, which aims at a 19% coal share in the 2030 electricity mix.

At the G20 meeting in Rome last October, countries resolved to end “public finance for new unabated coal power generation abroad”. On this occasion, Japan declared its intention “to end new direct government support” for such projects. The Japanese wording is important as it leaves the door open to continue backing overseas coal projects through the Japan International Cooperation Agency (JICA). This is because JICA, due to its legal status as an independent administrative institution, is not technically a government agency even though it operates like one.

Last year’s Cop26 climate talks ended with the Glasgow Pact calling for a phasedown of unabated coal power and fossil fuel subsidies. Many participating countries signed the Global Coal to Clean Power Transition Declaration and a pledge to stop funding foreign fossil fuel projects. Japan signed neither.

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Japan’s new prime minister, Fumio Kishida, has been noncommittal on a coal phasedown. In his policy speeches and his Cop26 speech, he boasted about Japanese environmental leadership, but conspicuously avoided any mention of coal. His chief cabinet secretary, Hirokazu Matsuno, perfectly conveyed the government’s lack of ambition when he insisted that Japan’s plans are “in line” with the Cop26 agreement’s call for a phasedown of coal. 

The government pins its hopes on “clean coal” technologies like carbon capture and storage to mitigate the climate impact of coal, but the feasibility of these is highly doubtful. A recent report by Transition Zero concluded that these technologies “are high-cost with limited carbon-reduction potential in the electricity sector”. 

In short, Japan has consistently resorted to semantic acrobatics to extend the life of coal power. 

Japan’s unrelenting coal addiction not only threatens to undercut its “lofty goal” of cutting greenhouse gas emissions by 50% by 2030, it also risks locking other Asian countries onto a similar trajectory of coal dependence. 

As Japan now will begin banning Russian coal, it should not look for new coal partners, but rather use this moment as an opportunity to earnestly transition away from coal. It is high time for Tokyo to join global efforts to contain the climate crisis by reducing emissions in the electricity sector.

Florentine Koppenborg is a postdoctoral researcher and lecturer and the Bavarian School of Public Policy (HfP) at the Technical University of Munich. Ulv Hanssen is an associate professor at the Faculty of Law at Soka University and an associate research fellow at the Swedish Institute of International Affairs.

The post As Japan sanctions Russian coal, it is high time to kick the habit altogether appeared first on Climate Home News.

With much of Europe and North America looking to sever ties with Russia, countries have been scrambling for replacement supplies of oil, gas and coal, and it has sent prices surging.

Consumers are bearing the brunt of higher energy prices, with petrol prices surging to unprecedented highs while rocketing coal and gas has seen Australian wholesale electricity futures up almost 30 per cent since the start of the year, also returning to near all-time highs.

The disruption caused by the conflict in Ukraine has contributed to surging global coal prices, exceeding US$450 per tonne (A$608) in some markets.

The price for coal from the Australian port of Newcastle for March delivery is still trading above US$330 per tonne (A$445), a record high. European oil prices are still currently trading above US$110 per barrel, prices not seen since 2014.

Much of the Asian gas market is pegged to the oil price, and so the region’s gas prices have followed oil higher.

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Some one has to pay for it, and that will be the consumer. But rather than being concerned about the consumer impacts of high price of fossil fuels, Australian prime minister Scott Morrison and his government have welcomed it.

“Total coal exports in the three months to January were $24.27 billion – a staggering 159% increase on the same period a year earlier and 18% above the earnings for the three months to October 2021,” federal resources minister Keith Pitt recently celebrated in a statement.

Australia has even promised to make a coal donation to Ukraine which prime minister Scott Morrison said will “power up their resistance”. But doubts remain around when and if the delivery could actually happen.

There had initially been speculation that Australia had simply arranged for additional coal to be sent from a neighbouring country, like Poland, in an arrangement that would mirror those similar to Australia’s provision of arms and humanitarian assistance.

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But, on Sunday, Morrison made clear that the coal would be sent from Australia to a destination port somewhere in Ukraine.

“It’s our coal. We dug it up. We’ve arranged the ship. We’ve put it on the ship and we’re sending it there to Ukraine to help power up their resistance and to give that encouragement,” Morrison said during a press conference on Sunday.

“We understand that it can power up to about a million homes and this is incredibly important.” The 70,000 tonnes of coal would be enough to fuel a medium-sized coal fired generator for around 3-5 days.

A spokesperson for Whitehaven coal confirmed that the cost of the coal, and its delivery, will be borne by the Australian government. At current prices that would be paying Whitehaven as much as $31 million for the donated coal, using taxpayers’ money.

The government will entrust the delivery of coal to commodities trading firm Trafigura.

“In a very tight global market where demand for our thermal coal remains very high, Whitehaven has managed to secure the extra supplies without impacting existing contracts to other international partners,” Pitt said in a statement.

It’s not clear if or when the delivery of the coal may be made, given Russian warships are patrolling the Black Sea, effectively blocking access to Ukraine’s ports.

Around one-third of Ukraine’s electricity generation was provided by coal-fired power stations before the conflict. Supplies have been tight, with much of the country’s coal mining industry located in the contested Donbas region.

The post Australian government welcomes high fossil fuel prices, ships coal to Ukraine appeared first on Climate Home News.

Countries agreed at the Cop26 climate talks to wind down unabated coal power, albeit with no timeline nor a consensus for a total phase-out.

Asia turned against coal finance. First South Korea, then Japan and finally China, the world’s largest coal financier, put an end to support for new coal power projects abroad, effectively drying up international cash for unabated coal.

But it could be a long goodbye. Plans to exit coal power at home proved a more difficult conversation for coal-dependent governments, including China, India, Russia and Australia.

And promises made throughout the year are yet to be backed with concrete policies and the accelerated roll out of green alternatives. A carbon-intensive recovery to the Covid pandemic, particularly in China, drove global coal power generation to a record high in 2021.

Here were the biggest moments.

January

Data emerged showing China’s biggest coal-producing province, Inner Mongolia, had approved power and industrial facilities in 2020 that would lock in annual coal use the size of Germany’s. It was the most striking example of Beijing’s coal-powered recovery to the pandemic.

February

Central government inspectors slammed China’s energy authority for promoting coal power expansion without regard for Beijing’s environmental goals. The highly critical report was hailed as “groundbreaking” and a show of Beijing’s challenges to reflect president Xi’s climate ambition in all planning decisions.

In Bangladesh, the government announced plans to scrap nine coal power plants. The high cost of imported coal, declining financial support from overseas investors and Bangladesh’s role as chair of the Climate Vulnerable Forum were cited as reasons for the decision.

Plans to build the UK’s first deep coal mine in 30 years for coking coal were suspended after the government was accused of “rank hypocrisy” for greenlighting the project while calling for global climate action.

March

UN chief António Guterres demanded the G7 group of wealthy nations exit coal by 2030 and “cancel all global coal projects in the pipeline” – putting pressure on Japan and the US to produce exit plans.

In its plan for economic development to 2025, China made no plan to halt coal expansion but promoted “the clean and efficient use of coal”. Analysts said Beijing’s climate policy was “crawling” to carbon neutrality.

Ordos, Inner Mongolia, has some of the biggest coal reserves in China (Pic: Robert James Hughes/Flickr)

April

Traditional coal backer South Korea pledged to end its coal funding to other countries during a leaders’ summit hosted by newly elected Joe Biden in April. President Xi Jinping said China would “gradually reduce” its coal consumption from 2026-30 – suggesting a peaking date in 2025.

May

The Asian Development Bank drafted a policy to end all financing for coal mining and power plants, accelerating a shift away from coal across Asia.

The UK Cop26 president Alok Sharma used the momentum of a global shift away from coal to announce the Glasgow summit in November would “consign coal to history”.

In its first 1.5C-aligned scenario, the International Energy Agency (IEA) warned that fossil fuel expansion had to end this year if the energy sector was to achieve net zero emissions by 2050.

After initial resistance, Japan agreed to a G7 pledge to end support for unabated coal power abroad by the end of 2021 – leaving China isolated as the last major coal funder overseas.

June

The head of the Climate Investment Funds, Mafalda Duarte, trails a $2 billion scheme to support coal-reliant developing nations in the transition to clean alternatives, in an interview with Climate Home. This was to include derisking private capital and helping governments create alternative jobs and social security schemes in mining regions.

A woman watches over her sheep that graze near a coal power plant in Jepara, Central Java (Photo: Kemal Jufri/Greenpeace)

July

China’s biggest bank, the Industrial and Commercial Bank of China (ICBC), said it would no longer finance a 2.8GW coal power plant in Zimbabwe, citing “environmental problems” amid a wave of cancellation of Chinese-backed coal projects.

South Africa’s climate advisors urged the government to step up its 2030 climate ambition by accelerating a shift away from coal and ending new coal power projects.

But Indonesia submitted a long-term strategy to the UN showing that the amount of coal used for primary energy would continue to grow until at least 2050.

At the G20, climate and energy ministers, including from Indonesia, came to an impasse on phasing out coal power with China, Russia and India resisting a deadline to wind down the fossil fuel.

August

Brazil defied the Italian G20 presidency’s call for a coal phase out and published a plan seeking investment in coal mining and allowing the fossil fuel to be burnt until 2050.

The Sri Lankan government ruled out building another coal-fired power plant.

A report by Greenpeace found that China only approved 5.2GW coal projects in the first half of 2021 – a 79% decline on the coal capacity that was approved during the same period in 2020. Campaigners said decision-makers were receiving “mixed signals on coal” as local governments slowed the approvals of new projects but were “still anticipating financial support”.

September

President Xi Jinping announced at the UN general assembly that China would stop supporting new coal power projects overseas– effectively drying up international cash for unabated coal. The move came 10 months after China’s environment ministry floated a proposal to ban coal power investment abroad.

The decision was taken amid a severe power crunch across China caused by surging coal prices and supply constraints together with skyrocketing coal consumption across the country. Local media outlets attributed the power shortages to environmental policies, which analysts feared could lead to a backlash against climate action.

Women and children walk past the NTPC coal-fired power plants in Sipat in the central Indian state of Chhattisgarh (Photo: Sri Kolari / Greenpeace)

October

Rising energy demand and surging coal prices brought the power crisis to India, with coal stocks shrinking to four days’ worth at one of the lowest points.

During a G20 leaders’ meeting in Rome, some members including China and India baulked at setting a timeline to exit coal. But with China onside, the group committed to end international public finance for unabated coal power generation by the end of 2021.

November

The future of coal dominated Cop26 talks in Glasgow, UK.

More than 40 countries signed a statement agreeing to phase out coal power, including 18 nations promising to phase out or stop investments in new coal-fired plants domestically and internationally for the first time. Australia, China, India, and the US were all missing from the deal.

Despite a last-minute watering down by China and India, the Glasgow climate pact called on countries to “accelerate the phasedown of unabated coal power” – a significant first in the UN Climate Change process.

An $8.5bn transition package to help South Africa wean off coal was hailed a model to support other large emerging economies transition to cleaner energy sources. But questions remain over how it will be delivered.

Indonesia, India, the Philippines and South Africa were named as beneficiaries of the $2bn Climate Investment Funds pilot scheme to support the transition from coal to clean.

At the end of the month, Germany’s newly formed coalition government announced a plan to “ideally” quit coal by 2030 – eight years ahead of schedule.

December

Despite significant policy shift away from coal power, the amount of electricity generated from coal surged 9% in 2021 with overall coal demand heading towards an all-time high in 2022, analysis by the IEA found.

This sharp rebound, led by China and India, follows two years of falling global power generation from coal in 2019 and 2020 and is threatening net zero climate plans, the IEA warned. Electricity demand rising faster than low-carbon supply and soaring fossil gas prices are cited as explanations.

The post 2021 in coal: China’s dirty recovery mars international finance crackdown appeared first on Climate Home News.

The treaty crafted by the so-called “traffic light coalition” formed by the Social Democrats (SPD), the Green Party, and the pro-business Free Democrats (FDP), has to deliver on the parties’ key climate policy promise to get the country on an emissions reduction path compatible with the 1.5°C-degree global warming limit of the Paris Agreement.

Germany’s likely new government has agreed to speed up the country’s coal exit and accelerate the rollout of renewable power to get the country on track for climate neutrality.

“We will align our climate, energy and economic policies nationally, in Europe and internationally with the 1.5 degree path and activate the potential at all levels of government,” states the coalition agreement between Social Democrats (SPD), Greens, and pro-business Free Democrats (FDP).

“With ambition and perseverance, we are making the country a pioneer in climate protection,” SPD chancellor candidate Olaf Scholz said during the treaty’s presentation in Berlin.

He added that “modernisation won’t be for free – we will invest massively so Germany can stay a world leader.”

Laggards reject Glasgow pact’s 2022 call for new climate plans

Germany plans to become climate neutral by 2045, but the measures implemented by the outgoing government, a coalition between chancellor Angela Merkel’s Conservatives and the SPD, are insufficient to reach that target.

The September vote had been called a “climate election” due to the high importance many voters had given the topic. The next German government’s plans also have an enormous impact on international and particularly on European climate policy and the EU Green Deal.

The 178-page document that explained the new coalition’s plans in all policy areas contained long sections on climate and energy. SPD secretary general Lars Klingbeil already during the negotiations had said climate would be “perhaps the most important point” in the treaty.

This article was produced by Clean Energy Wire and shared under a creative commons licence.

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Anil Jain, India’s coal secretary, made the remarks while launching a report by the National Foundation for India (NFI) on the socio-economic impacts of weaning the country off coal.

“Now there is an international consensus. There is a goal: phasedown, which will happen. India is a signatory to that. I’m sure in the coming years the pressure will be to quantify the phasing down. We cannot escape that and nor does India intend to dilute its commitment,” he said.

India, backed by China, made a last-minute diplomatic push at the Cop26 climate talks in Glasgow to water down the language of the final agreement from calling for a “phaseout” of unabated coal power to a “phasedown”.

Prime minister Narendra Modi has promoted coal mine expansion, with plans to ramp up domestic coal production from 783 million tonnes in 2019 to one billion tonnes per year as part of his self-reliant India policy.

But analysts say the plans are incompatible with India’s strengthened headline climate targets for 2030 and 2070 net zero goal announced by Modi at Cop26.

The newly launched NFI report says the carbon neutrality goal alone “sounds the death knell for coal expansion in the country” and “puts India on a path to transition towards a cleaner greener economy”. But with millions of people dependent on the coal sector, NFI says India needs a transition plan.

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Ashish Fernandes, a coal expert at Climate Risk Horizons, told Climate Home News negotiations in Glasgow forced India to confront the need to wind down the coal sector, which the government “has been reluctant to address head on”.

Signing up to the “phasedown” language was “huge progress” for a country where energy demand is expected to skyrocket, said Sandeep Pai, a senior research lead with the Just Transition Initiative.

“But there is no trajectory for India to decrease its coal use this decade,” he said. And the absence of a clear “phasedown” timeline means it leaves the text open to interpretation.

At the political level, the very idea of a phasedown is resisted. Environment minister Bhupender Yadav, who negotiated the language change in Glasgow, told an event that the term “phasedown” means India can decrease its share of coal in the energy mix but allow its coal use to rise in absolute terms.

The Delhi-based Council on Energy, Environment and Water estimates that to achieve net zero by 2070, India would need to peak its use of coal for power generation by 2040 and drop its overall usage by 99% by 2060.

For Fernandes, there is no space in India’s energy sector for the “all of the above approach” which Delhi has been pursuing, expanding both coal and renewable sources.

A recent study by Climate Risk Horizons and think tank Ember found that 27GW of planned coal power plant capacity were not needed and risked impeding India’s renewable energy ambitions.

Instead, the government should be “more aggressively” shutting down old and inefficient coal power plants and commit not to build any new coal plants, said Fernandes.

Swati D’souza, who led the NFI study, told Climate Home that India’s coal transition conversation was “just beginning”.

NFI’s report is the first comprehensive analysis to map the scale of the transition across all of India’s coal-consuming industries.

It conservatively estimates that more than 13 million people – nearly the size of the population of Zimbabwe – depend on the coal economy, with people in 135 districts depending on two or more coal assets for their livelihoods.

That excludes those working in the informal sector that could grow the number to 20 million people impacted by the transition.

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Not everyone will require the same support. It will be easier to rehabilitate skilled workers in the power sector than the low-skilled and poorly educated workforce in the brick sector, D’souza said. Bricks are made in coal-burning kilns.

The report finds that the government needs to prepare a timeline for closing coal assets that will start with mine closures.

In 2019, 94 open cast mines of the 420 coal mines in India were producing 85% of the country’s coal. Only 128 mines were making a profit. That means that underground mines, most of which are loss-making, will likely shut this decade, NFI found.

“There will be a phasedown for coal mines,” D’souza said. “But, in the medium term, we will definitely see an increase in the amount of coal consumption.”

Ultimately, achieving the transition hinges on a financing which doesn’t currently exist.

Coal secretary Jain said coal mining companies and employers could not be asked to foot the bill or they risked “deserting” the sector entirely.

NFI says India’s domestic resources won’t be enough to implement the transition and it will need to international support.

An $8.5bn transition package mobilised for South Africa could provide a model for India. But the report adds that it will require the government to determine how much money is needed to implement the transition and support existing workers.

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Analysts say the current crisis, along with falling support from investors to finance new coal-fired plants, raise serious questions about the government’s plans to expand coal production. 

According to India’s power ministry, the country’s 135 thermal power plants had an average of just four days of coal stocks on Friday, down from 13 in early August. 

While the situation is not as severe as in China, where a power crunch has forced factories to curb production and left households without electricity, India’s coal supply crisis could drag on for months and lead to power outages, its power minister has warned. 

“I don’t know whether I will be comfortable in the next five to six, four to five months,” power minister Raj Kumar Singh told The Indian Express this week. “Normally the demand starts coming down in the second half of October… when [the weather] starts cooling…but it’s going to be touch and go,” he said.

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Dave Jones, senior electricity analyst at Ember, told Climate Home News India is “on red alert” for power rationing, which was introduced in north-eastern China. 

India’s power generators have cut back on importing coal in recent months as international prices surged, following increased demand from China. “It’s clear that China is hoovering up coal and creating problems for the rest of the world,” said Jones. 

But India’s own growth in coal demand in August was “unprecedented and caught coal companies and plants unprepared,” Karthik Ganesan, fellow at the Council on Energy, Environment and Water (CEEW), told Climate Home. National demand for coal in India surged by 16% between June and August, according to CEEW analysis. 

Increased economic activity as sectors open up following the pandemic, power plants not anticipating the surge in demand and monsoon rains which impact coal production every year have led to the shortages, explained Swati d’Souza, research lead for climate action at the National Foundation for India. 

“The shortages show how despite renewable energy penetration, coal continues to be the backbone of the Indian economy,” d’Souza told Climate Home. 

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Coal-fired power accounts for around 66% of India’s energy mix, up from 63% last year, according to CEEW. 

“As climate change increases erratic and extreme weather, diversifying fuel sources is going to be an important strategy to make our energy systems resilient to climate shocks,” Ulka Kelkar, director of climate at World Resources Institute’s India office, told Climate Home.

India is on track to exceed its target of delivering 450GW of renewable energy by the end of the decade but it continues to expand its coal capacity. India currently has 233 GW of coal plants in operation and a further 34.4 GW under construction. 

India’s prime minister Narendra Modi wants to ramp up domestic coal production to one billion tonnes per year as part of his self-reliant India policy. Campaigners say the government’s coal expansion plans threaten the lives and livelihoods of indigenous communities. 

India is yet to submit an improved 2030 climate plan to the UN and promised to do so by the Cop26 climate talks next month. How the power crisis will impact its plan remains unclear.

Earlier this year, the International Energy Agency warned that Modi’s coal expansion plans are “difficult to reconcile with India’s evolving energy needs and environmental priorities.”

Analysts say that domestic coal production is likely to increase over the next few months to make up for the shortfall. Longer-term, the government should move away from coal production and invest in clean energy sources to reduce vulnerability to supply shocks, they say. 

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“We don’t need to create more coal mines and power plants, the focus should be on building more renewable energy generation,” Vibhuti Garg, an energy economist at the Institute for Energy Economics and Financial Analysis (Ieefa), told Climate Home. 

“The government wants to increase domestic production, [but] we do not see much participation by players to enter the coal mining space. They understand the challenges: that arranging finance would be problematic,” she said, noting that not a single foreign investor has expressed interest in financing new coal projects since Modi opened coal mining to private investment last year. 

India received no bids for more than 70% of new coal mines up for auction, Reuters reported in July. 

According to analysis by Ember, India does not need to build any new coal power plants to meet expected energy demand by 2030. New construction will lead to 27 GW of  “zombie plants”, which are not operational, it warned.

“Every day those coal power plants are looking less likely,” said Jones, adding that the lack of investment “seals the fate of the next round of those zombie coal plants”. 

According to Garg, industrial players are already looking to decrease their reliance on coal by investing in solar power. “They want to reduce their reliance on utility coal power, because it’s not as reliant and it’s expensive. 2021 has been a very promising year for solar rooftop deployment.” 

Garg said the government may consider a U-turn on its coal expansion plans if it is able to meet energy demand through renewable energy and battery storage. 

“As long as the increased demand is met, they will be happy with that,” she said.

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Climate analysts are concerned that the power shortages, which have been attributed to environmental policies by many media outlets, could lead to a backlash against climate action. 

Factories, owned by suppliers to companies including Apple and Tesla in the northeastern cities of Shenyang and Dalian, have been hit as provinces have been forced to ration power supplies. People in northeast China have said on social media that they are without heating and that lifts and traffic lights are not working.

Citizens and businesses are calling on the government to increase coal imports to allow businesses to continue operating and keep lights on. Han Jun, governor of the affected Jilin province, has said China should source more coal from Mongolia, Indonesia and Russia.

Following the Covid-19 lockdowns, China’s coal consumption has skyrocketed. This is partly due to the government launching a large number of construction projects to stimulate the economy, Lauri Myllyvirta, an analyst at the Centre for Research on Energy and Clean Air, told Climate Home News. This has not increased electricity prices, which are regulated, but has led to surging coal prices and forced many power plants to cut back on purchasing coal to avoid running a loss, he said.

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According to Goldman Sachs, as much as 44% of China’s industrial activity has been impacted by the power shortages. The bank said on Tuesday that it was cutting its GDP growth forecast for China to 7.8%, from the previous 8.2%.

China gets 60% of its electricity from burning coal.

The power cuts have fueled misleading reports that environmental policies are to blame, rather than the high coal prices, analysts told Climate Home News.

The Chinese government announced earlier this month that it will introduce tougher punishments for regions that fail to meet targets aimed at cutting energy intensity. 

“Statements by China’s grid operators have clearly attributed the cuts to high coal prices and low availability, but a lot of media stories have sought to link the [power cuts] to energy consumption control targets that a lot of provinces have struggled to meet this year,” Myllyvirta said. “This looks a lot like an attempt by the opponents of China’s climate policies and targets to make hay out of the situation.” 

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“It’s problematic to say the least. It may well trigger a backlash against strong climate action and put climate efforts in peril,” Dimitri De Boer, who heads ClientEarth’s China office, told Climate Home News.

“This power shortage is not helping. People think they cannot do without coal,” said De Boer, adding it has highlighted the need for “an orderly climate transition where economic growth can continue and people’s livelihoods can continue to improve.”

“This episode is risky in that sense,” he said. “We want to see a win-win transition.”

Yan Qin, lead carbon analyst at Refinitiv, said “fossil fuel lobbyists will use this opportunity to argue for slacker emissions reduction targets for the provinces” in China’s 14th five year plan. The policy document sets out an 18% reduction target for CO2 intensity from 2021-2025.

Regulators are expected to intervene soon, added Qin, noting that they do not have many options available. “One would be to increase coal mine output at Inner Mongolia and Shaanxi as quickly as possible. The second would be to subsidise coal prices for power plants so that more of them are willing to operate,” she said. 

The situation is unlikely to improve in the short term, especially with winter around the corner, she warned. “In the scenarios of extreme cold snap and low renewables output, China can see risks of power shortages again.”

In the short term it is essential that coal supply is increased to restore power supply, said Myllyvirta. “In the longer term, the rational response would be to dramatically increase investment in clean energy to reduce the vulnerability to such supply shocks,” he said.

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In September, the government said it would aim to reach net zero emissions by 2050 — but the plan still allows coal beyond that date. 

To achieve its 2050 goal, president Cyril Ramaphosa set up a presidential climate change commission to advise the government on how to ensure a just transition away from coal and reduce its emissions. 

In its first public report, the commission recommended the government set a tougher target and limit its annual greenhouse gas emissions to 350-420 MtCO2 by 2030. This would deepen emissions cuts by 31% compared to South Africa’s 2015 pledge, which capped emissions at 614 MtCO2. 

Its recommendations are more ambitious than what the government is currently proposing. Under a draft 2030 climate plan, published in March, the government said it aimed to limit its annual emissions to 398-440 MtCO2 by 2030 – a 28% emissions cut compared to the 2015 target. 

The commission said there was “scope for considerably greater emission reductions” by accelerating energy efficiency measures, bringing forward the decommissioning and repurposing of coal-fired power stations as they become financially unviable and replacing them with low-carbon energy capacity.

It argued increased climate ambition could help unlock more financial support to help the country move away from coal.

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In a statement, Ramaphosa said he will consider the commission’s recommendations, which will inform a decision on stepping up the country’s climate ambition ahead of the Cop26 climate talks. 

Saliem Fakir, executive director for the Africa Climate Foundation, told Climate Home News, the new targets would make ongoing support for coal “untenable”. “If adopted it will be a major breakthrough,” he said. 

But three members of the 22-strong presidential commission, which includes environmentalists, trade unions and business groups, say the proposal doesn’t go far enough.

In a letter, seen by Climate Home News, they write: “What is needed is zero fossil fuels in electricity generation by at least 2040 (though 2035 would be preferred); and a zero fossil fuel economy by 2050. This will mean no new fossil fuel projects come on line or are considered.” 

The letter calls on the commission to support a more rapid decommissioning of coal plants, recognising that some coal assets will become stranded. It adds the government should cancel a pipeline of major gas projects, including the proposed 8400MW Nseleni floating gas power plant in the city Richards Bay and a 3000MW gas development in Coega, near Port Elizabeth.  

Plans for a 3,300MW coal-fired power station should also be scrapped, they said.  

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“The commission’s range is still not sufficient,” Melissa Fourie, one of the authors of the letter and the executive director of South Africa’s Centre for Environmental Rights, told Climate Home.

The letter argues for a significantly tougher climate target in line with what would be South Africa’s fair share to limit global heating to 1.5C: capping annual emissions to 274–352 MtCO2 by 2030. 

“The low-hanging fruit here is the electricity sector, where we could substantially decarbonise at minimal cost,” said Fourie. “As a first step, the government should abandon its plans for new fossil fuel (coal and gas) electricity capacity.” 

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The climate commission’s report found that South Africa will require “considerably higher levels of international financial support” to transition away from a coal-dependent energy system.

South Africa estimates it will need $8 billion a year from the international community by 2030 to finance its decarbonisation and adaptation efforts. 

State-owned utility Eskom, which operates most of the country’s coal-fired power plants, is asking for $10bn from global lenders to help its transition from coal to renewables. 

In 2020, Eskom’s coal plants generated 86% of the country’s electricity, making South Africa the most coal-reliant country among the G20 group of nations.   

Eskom is currently building two of the world’s largest coal plants, Medupi and Kusile, which are not scheduled to close until at least 2060. Yet, Eskom’s energy transition leader Mandy Rambharos recently told Reuters:  “I don’t think we can look at 2050 and still see fossil fuels in there to be honest.” 

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The Climate Investment Funds (CIFs) secured up to $2billion this year from G7 countries to help wean the world off coal as part of efforts to limit global heating to 1.5C – the tougher goal of the Paris Agreement. 

“It is not enough to focus on clean energy investment,” Mafalda Duarte, CEO of the Climate Investment Funds, told Climate Home News in an interview. “Unless we focus on accelerating the pace at which we move away from coal, we are not going to meet the Paris Agreement goals.”

Earlier this year, Cop26 president designate Alok Sharma said the UK wanted to make the November Glasgow summit “the Cop that consigns coal to history”.

Duarte said the G7’s funding pledge was “a powerful signal” to developing nations that rich countries support their energy transition.

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The CIFs is in the process of identifying two or three developing countries to pilot the programme and benefit from the first tranche of investment.

South Africa, India and Indonesia are potential candidates, where coal mining is a significant but precarious source of employment.

Earlier this week, Coal India, one of the world’s largest mining companies, responsible for around 80% of India’s coal output, announced it will cut its workforce by 5% every year for the next 5-10 years to reduce costs as it plans to close unviable mines. There was no mention of a plan to reskill workers.

Duarte urged all coal-dependent nations to get in touch. If successful, subject to support from donor countries, the programme could be extended.

The aim, Duarte said, is to “accelerate the tipping point at which it’s cheaper to build a new renewable energy power plant than maintain an existing fossil fuel plant” – something that still isn’t the case in many developing countries.

According to analysis by the Rocky Mountain Institute, in 2020 the net cost of completing the global coal-to-clean transition would have been $128 billion, dropping to near zero by 2022 before generating net savings of more than $107bn by 2025.

But, while in the US and Europe completing a coal phase out in 2020 already offered estimated annual net savings of around $9bn each, in China and India it would have resulted in annual net costs of $41bn and $21bn respectively, according to the study.

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Duarte told Climate Home that, although an estimated 42% of global coal capacity is already operating at loss, “pure economics are not going to play in favour of divesting from [relatively new] coal assets in time for meeting the Paris goals”.

Divesting from existing infrastructure is a lot more complex than investing in renewable energy, she added.

To address this, CIFs will use the G7’s $2bn to de-risk private sector capital and lower investment costs to repurpose coal assets, strengthen countries’ institutional capacity to manage the transition and create alternative job opportunities and social protection schemes for communities dependent on coal for their livelihoods.

Duarte said the CIFs would use the funding to demonstrate what sort of investments have the most impact when delivered at scale to accelerate a country’s coal exit.

“And then the market picks up and private capital can scale it to the point where you are moving in the direction of solving the problem. That is the point of acceleration,” she said.

In its statement, the G7 said the $2bn in funding was expected to mobilise $10bn in co-financing from the private sector.

The CIFs mobilises $9.5 for every $1 of concessional funding it spends in middle-income countries, Duarte told Climate Home. Others say it’s not as much. Analysis by Joe Thwaites, of the World Resources Institute, finds the CIFs has so far delivered $4.7 for every $1 spent.

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Perhaps most importantly, the fund will aim to showcase investments and social protection measures to support communities move away from fossil-fuel jobs.

Duarte told Climate Home there was very little research and evidence on what the transition of fossil fuel-dependent communities looks like in developing countries.

“I would say we desperately need to do work in this area and figure out how to do this. Otherwise, I don’t think we’re going to succeed,” she said.

The story was updated on 01/07/21 to add analysis on the amount of co-financing the CIFs mobilises. 

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It is a significant increase in ambition for the coal-reliant Asian economy but does not match the recently updated targets of allies Japan and the US.

During a speech to parliament on Wednesday, the leader of the Democratic Party Song Young-gil said, “We must present a national greenhouse gas reduction target of at least 40% and implement it within eight years.”

He said that South Korea’s current goal of slashing emissions by 24.4% by 2030 “is absolutely low compared to developed countries”.

The national climate plan is due to be finalised for submission to the UN ahead of Cop26 climate talks in Glasgow, UK this November.

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Campaigners said the proposed 2030 goal is not ambitious enough. According to Climate Analytics, South Korea should slash emissions at least 59% by 2030 as a fair contribution to the Paris Agreement.

“Considering that neighbouring Japan has announced [a national emissions target] of 46-50% below 2013 levels, Korea must do more in order to establish its climate leadership, especially as a candidate to host Cop28,” said Joojin Kim, managing director of South Korean campaign group Solutions For Our Climate.

Cop28 is the UN climate summit scheduled for 2023, when it is the turn of a country in the Asia-Pacific region to host.

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Coal remains a big problem for the country. Coal fired power generation accounts for 40% of total electricity output. South Korea has not set a date for ending coal power and has 7.2 GW of coal capacity under construction, according to Global Energy Monitor data.

According to Climate Analytics, South Korea must phase out coal power by 2029 if it is to meet its obligations under the Paris Agreement. Kim said the 2030 proposal would likely trigger new coal exit discussions.

In November, the country’s council on climate and air quality recommended that the government consider phasing out coal by 2040 or earlier. 

South Korea is investing in offshore wind and solar energy, but campaigners say growth is too slow. Renewables make up just 7% of the country’s electricity mix, the lowest share of any member of the International Energy Agency.

Renewables must increase seven-fold by 2030 and twenty-fold by 2050 to meet South Korea’s net zero goal, according to analysis by Solutions For Our Climate. 

Under the new proposal, renewables would need to make up at least 40% of total electricity generation by 2030, Kim said.

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Sharma is due to set out his vision on Friday in Glasgow, Scotland, where the Cop26 climate negotiations are due to take place in November. He will cite the strongest target in the Paris Agreement, a 1.5C global warming limit, in a plea to accelerate the shift to clean energy.

“If we are serious about 1.5C, Glasgow must be the Cop that consigns coal to history. We are working directly with governments, and through international organisations to end international coal financing…  and to urge countries to abandon coal power, with the G7 leading the way,” he will say, according to a script released to media in advance.

His speech is the clearest yet on the UK hosts’ criteria for a successful conference, beyond the technical task of finalising the Paris Agreement rulebook.

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In recent months, there have been several signs that Asia is ready to pivot away from coal, following the trend in Europe and North America.

At the US-hosted leaders’ climate summit last month, South Korea committed to end overseas coal financing and China pledged for the first time to peak coal consumption in 2025 before gradually reducing its coal reliance over the following five years.

A growing number of Asian lenders are turning their back on coal. The Asian Development Bank and Japan’s Sumitomo Mitsui Financial Group were among a number of financial institutions to recently announce they would end financing for all new coal-fired power plants.

The UK has largely moved beyond coal. In 2012, coal accounted for 40% of the UK’s electricity. Today, it is less than 2%, according to 2019 government data. The UK has committed to phase out all coal power by 2024.

A planned new coking coal mine in the north of England is under review after the government’s official advisors pointed out the contradiction with UK climate goals.

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UN secretary general António Guterres’ unusually prescriptive message to governments laid much of the groundwork for the recent shift. Guterres has been calling on nations to stop building new coal plants since 2019 and more recently urged rich nations to phase out coal power by 2030 and developing nations by 2040.

Citing Guterres, Sharma will describe the coal business as “going up in smoke“.

“The days of coal providing the cheapest form of power are in the past. And in the past they must remain. So let’s make Cop26 the moment we leave it in the past where it belongs, while supporting workers and communities to make the transition, creating good green jobs to fill the gap,” Sharma will say.

Billing the Glasgow summit as “our last hope of keeping 1.5C alive”, Sharma is due to outline the diplomatic plan to mobilise climate finance, improve adaptation and enhance global ambition in the coming months. This includes using the UK-hosted G7 and Italy-hosted G20 forums.

“I have faith that world leaders will rise to the occasion and not be found wanting in their tryst with destiny,” he will say.

Climate Action Tracker estimates the world could limit global temperature rise to 2.4C by the end of the century if all current climate pledges and targets are fully met. Putting the world on track for 1.5C requires much higher ambition from all nations, and particularly the largest emitters. 

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The sudden shift follows a landmark court ruling in favour of youth plaintiffs and reflects rising public demand for green policies ahead of September’s election.

Finance minister Olaf Scholz and environment minister Svenja Schulze announced the proposed targets to press in Berlin on Tuesday: a 65% emissions reduction by 2030, 85-90% by 2040 and net zero emissions by 2045, all compared to 1990 levels. Previously, the goals were 55% by 2030 and climate neutrality by 2050. 

If adopted by the cabinet next week, Germany would have the second deepest 2030 emissions reduction target of any major emitter, compared to 1990 levels, after the UK. It would be the biggest economy to match Sweden’s 2045 net zero ambition.

The move reignites an intense debate around Germany’s coal exit and carbon price on fuel for transport and buildings – two issues which could now dominate the election.

Top court rules German climate law falls short, in ‘historic’ victory for youth

Germany’s top court ruled last week that the country’s climate law is partly unconstitutional and ordered the government to draw up clear emissions reduction targets after 2030. The case was brought by youth climate activists who argued that the law violated their right to a humane future as it did not go far enough to limit global temperature rise to 1.5C.

The current 2030 target of 55%, compared to 2010, has been ranked as “highly insufficient” by Climate Action Tracker. 

Germany’s plan to increase its targets came as a “big surprise”, Felix Heilmann, a researcher at the climate think tank E3G, told Climate Home News.

There had been talk of Germany increasings it targets, especially after EU leaders agreed to raise the bloc’s 2030 target from 40-55%, but this was not expected for another year, after a new government had been formed, he said.

“This wouldn’t have happened now without the supreme court ruling,” he said. “The government has been very positive of their climate achievements and never questioned the climate law which included those targets.”

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After the supreme court ruling, the government is facing “a lot of pressure to leave on a high note with regards to their climate policy. The cornerstone of that policy was the climate law,” he said. 

There was no real urgency for the government to respond to the court ruling, Niklas Höhne of the New Climate Institute told Climate Home News. The government has until the end of 2022 to announce a new target for after 2030.

But the upcoming election has put pressure on all parties to raise their ambition and show they are leading on climate. Recent polls put the Greens ahead of Merkel’s Christian Democratic Union. 

“After coronavirus, climate is the second biggest issue this election,” Höhne said. “Every party has climate change in their programme. It is a spiral to the top.” 

To achieve the new targets, Germany must rapidly phase out coal. The country currently does not plan on ending coal until 2038, which campaigners say is a decade too late to limit global warming to well below 2C.

“The picture is crystal clear; the new climate targets cannot be achieved if we don’t phase out coal by 2030,” Heilmann said.

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Besides ending coal, the new government must speed up the transition to electric mobility by investing in more charging stations and increase the carbon price on fuels used for transport and heating buildings, Höhne said.

Merkel is tipped to announce a new climate finance goal for 2025 at this week’s Petersberg Dialogue. Climate watchers say Germany should double its annual climate finance by 2025 if it is to do its fair share.

“It’s great to see Germany move ahead – but if they don’t step up international support in lockstep then we risk green recovery and low carbon transition remaining a luxury development pathway,” said Jennifer Tollmann, policy advisor at think tank E3G.

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The proposal by the ministry of state assets is part of negotiations between the government and energy companies to restructure the ailing coal sector.

Under the plan, 70 lignite coal units, which generated more than half of Poland’s electricity in 2020, will be purchased by the state and handed over to a single state-run National Energy Security Agency (NABE).

In a statement, the ministry said this would enable a “gradual and long-term transformation of the power sector” by replacing coal with low-carbon and green sources. In 2020, Poland’s share of electricity generated from coal dropped below 70% for the first time.

The merger of coal assets into a single entity is designed to give three state-owned energy companies – PGE, Enea and Tauron – fiscal space to develop clean energy sources.

Jacek Sasin, Poland’s deputy prime minister and minister of state assets, said banks were becoming reluctant to finance companies with carbon-intensive assets in their portfolio. He added pollution allowances required by the European Union to burn coal had become more expensive than the coal itself.

Sasin said the EU’s climate policy and goal to cut emissions at least 55% by 2030, compared with 1990, had created “a huge challenge for the Polish power sector”.

Poland’s council of ministers are expected to discuss the proposal before a broad social and inter-ministerial consultation.

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Aleksandra Gawlikowska-Fyk, an analyst at Forum Energii, told Climate Home News that the proposal was “a step in the right direction” if it enables energy companies to invest in clean energy.

But the plan lacks critical details about the need for a coal phase-out, she said, leaving out all climate considerations.

Pawel Czyżak, head of energy and climate research at the Warsaw-based Instrat Foundation, told Climate Home that without a coal exit date for energy generation, taxpayers’ money could be used to “run these plants forever”, a prospect he described as “worrying”.

“The government is completely neglecting the climate angle. Its energy strategy and plans are still incompatible with the EU’s climate policy,” he said.

The proposal would require approval from the European Commission under the union’s state aid rules.

Czyżak said this was a critical moment for Brussels to force Warsaw to agree a coal exit date. An outright refusal of the plan could be used by Poland to blame the EU for rising electricity prices, he warned.

Biden’s moment: What to expect from Thursday’s climate leaders summit

At the same time, the Polish government is seeking approval from the Commission for providing state aid to its coal mining sector, with an agreement between the government and mining unions tipped to be finalised this week.

The government has previously agreed to continue to subsidise coal production until 2049 – an exit date campaigners and experts say is far too late.

“The government will be fighting on two fronts and I believe it will be impossible to get approval for both from the Commission. It will be no nice Sunday talk,” Robert Tomaszewski, a senior energy analyst at Warsaw-based think tank Polityka Insight, told Climate Home.

Tomaszewski said Brussels was unlikely to green light Poland’s restructuring proposal for coal plants without a date to shut down old and inefficient plants.

Pakistan explores debt-for-nature scheme to accelerate its 10 billion tree tsunami

Under current rules, old coal plants in Poland are eligible for support under an energy capacity agreement approved by the European Commission. But the arrangement is coming to an end on 1 July 2025, when most existing plants will loose critical funding.

Without it, old and inefficient plants are anticipated to run at high losses. Around half of Poland’s coal fleet were operating with negative margins in 2020.

“Inevitably, NABE will have to close them down,” Tomaszewski said – a sudden shut down which will force investments in alternative energy sources to plug a looming capacity gap in the power system.

In February, the government approved a plan that aims to reduce coal’s share in the power mix to 56% by 2030 through deployment of offshore wind and onshore wind and solar energy.

Recent analysis by the Instrat Foundation found that the share of coal-generated electricity in Poland could decrease from the current 70% to just 13% in 2030, without compromising the country’s energy security.

Under this scenario, 76% of the electricity demand could be generated by renewable energy sources by 2030 and burning coal in power plants would end in 2035.

The post Poland seeks to nationalise coal plants so firms can finance green investments appeared first on Climate Home News.

The news agency reported on Wednesday that the new target would be a 40% cut from 2013 levels, then on Thursday that it would be 45%, citing government officials. The current target is 26%.

Prime minister Yoshihide Suga will have the final say, after negotiations between the environment and economics ministries.

Environmentalists and sustainable business leaders are lobbying for a target of up to 60%, with resistance coming from some industry associations.

Climate Action Tracker says a 60% cut would be “challenging” but necessary to align with the strongest target in the Paris Agreement to hold global warming to 1.5C.

Under previous prime minister Shinzo Abe, the Japanese government resisted international pressure to increase its 2030 target.

Since taking over from Abe, Suga has placed a greater emphasis on the need for climate action, pledging to reach net zero by 2050.

Suga will meet US president Joe Biden next Friday and attend the US climate leaders’ summit on 22 April.

Biden is reportedly planning a 50% emissions reduction by 2030 target, based on 2005 levels.

The country’s target start date of 2013 was one of the peaks of Japanese emissions as fossil fuels replaced nuclear energy following the 2011 Fukushima disaster. Most countries use 1990 or 2005 as the start dates for their emissions targets.

According to data from the International Energy Agency, Japan’s use of coal has steadily increased over the last few decades and the country’s use of fossil fuels grew sharply after the Fukushima disaster led to a clampdown on nuclear power. On the other hand, Japan’s use of solar power increased over the last decade as the costs fell.

Under the current energy plan, coal, oil and gas still account for 56% of the electricity generation mix in 2030. Renewables are expected to provide 22-24% of power.

Critics have said this plan phases out coal too slowly and is over-reliant on carbon capture and storage. METI is due to publish a revised energy plan in June.

In order to reduce emissions rapidly, Climate Action Tracker says Japan will have to phase out coal from electricity production by 2030 while electrifying end-use sectors and reducing electricity demand through  efficiency measures. Green hydrogen is likely to be needed for heavy industries like steel, it added.

UN chief António Guterres has called on G7 countries like Japan to phase out coal by 2030.

When announcing the net zero goal in October, Suga promised to “fundamentally shift” Japan’s coal policy.

Kyodo reports that Japan’s 2030 target will be officially announced by the G7 summit in June.

This article was updated on 9/04 to reflect new information on the proposed level of ambition.

The post Japan set to raise ambition of 2030 climate goal appeared first on Climate Home News.

The country’s power secretary Habibur Rahma decided to axe the planned coal-fired power plants with a combined power capacity of 7,461 MW at a monthly review meeting of the power sector, Bangladeshi newspaper the Daily Sun reported this week.

Analysts told Climate Home News that a number of factors have contributed to this decision, ranging from the high cost of imported coal to the drop in financial support from overseas investors. 

They said that exact details of Bangladesh’s transition away from coal are expected this summer, when the government outlines its power sector master plan. 

Bangladesh’s energy minister Nasrul Hamid told the Daily Sun that procuring coal had become a major problem after China struck a three-year supply deal in November to buy nearly $1.5bn worth of thermal coal from Indonesia — Bangladesh’s main coal supplier. 

And Bangladesh currently generates far more electricity than it needs. 

According to the Institute for Energy Economics and Financial Analysis (Ieefa), Bangladesh used just 40% of its power plants’ capacity in the year 2019-2020, down from 43% the previous year. Even if it does not use the energy, Bangladesh’s Power Development Board has to pay costly subsidies to the power plant operators. 

“Increased reliance on LNG and coal imports will drive up the cost of power generation. That will lead to higher power tariffs for consumers or more unsustainable fossil fuel subsidies,” Simon Nicholas, an energy finance analyst at Ieefa, told Climate Home News. 

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Bangladesh’s coal prospects have also been damaged by major financiers distancing themselves from dirty fossil fuel projects. The Asian Development Bank and Asian Infrastructure Investment Bank have both signaled they will move away from backing coal. 

The region’s biggest coal financiers, Japan and South Korea, have started to curtail their support for overseas coal projects under mounting international pressure.

Several of South Korea’s biggest financial institutions have announced they will no longer provide support for overseas coal projects. Japan has said that in principle it will not fund any new coal plants, but campaigners say a host of exemptions suggest few actual changes to existing coal policies. 

“Foreign private companies and financial institutions are not interested in financing more coal power projects in Bangladesh due to their reputational risk,” Yuki Tanabe, programme director at the non-profit Japan Center for a Sustainable Environment and Society, told Climate Home. 

“Bangladesh’s move will accelerate the end of coal-fired power projects in developing nations, built and financed by Japan and South Korea,” said Nicholas, of Ieefa. 

One of the coal projects that could be scrapped is a proposed 1,200 MW plant developed by Japanese energy company Sumitomo in Matarbari, south-eastern Bangladesh, according to the Daily Star report. The government has not yet disclosed the list of projects to be axed.

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Bangladesh’s role as chair of the Climate Vulnerable Forum, a coalition of 48 developing countries on the frontlines of climate change, will have contributed to its decision to move away from coal, said Khondakker Golam Moazzem, research director of the Bangladeshi think tank Centre for Policy Dialogue. 

As chair of the forum, Bangladesh has called on vulnerable nations to set an example for big emitters by submitting ambitious climate goals. 

“As president of the Climate Vulnerable Forum, Bangladesh has committed to promoting renewable energy both at domestic and international levels,” Moazzem told Climate Home. “[It] would be unacceptable if it continues promoting coal-fired power plants at home.”

Just 1.5% of Bangladesh’s total energy mix is currently generated from domestic renewable sources, according to Moazzem. “Investment in renewable energy based grid power generation is slow… most of the ongoing projects are being delayed,” he said, adding that the government needs to introduce more financial incentives for renewables. 

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News reports and previous government statements have suggested that Bangladesh may swap coal for LNG. Analysts say this is a risky strategy given the volatility of LNG pricing.

Bangladesh has already began building LNG import infrastructure and it could be about to double down on the fuel, Nicholas said. “Bangladesh has only just come through a period of very high LNG prices during which it was unable to secure cargoes or unwilling to pay high prices,” he added.

LNG is an unsustainable long-term solution for Bangladesh’s energy sector, analysts warn. Methane gas is commonly touted as a cleaner fuel than coal, because it emits around half the carbon dioxide when burned for energy. But methane, which can leak into the atmosphere during gas extraction or transport, contributes significantly to global warming. 

“It is environmentally polluting which is being ignored with the argument that it is less polluting compared to coal,” said Moazzem. 

The post Bangladesh scraps nine coal power plants as overseas finance dries up appeared first on Climate Home News.

Last month, the government was criticised by environmental campaigners and lawmakers for not blocking the construction of a new coal mine in Cumbria, northwest England. They said that the coal project weakened the UK’s leadership credentials ahead of hosting the Cop26 climate summit in November. 

The £165 million West Cumbria Mining project is to extract coking coal from below the Irish Sea for steel production, which will emit an estimated 8.4 million tonnes of carbon dioxide equivalent a year when burned.

In response to mounting criticism, the ministry of housing, communities and local government said in a statement that the planning application should be determined by the local council. 

Cumbria county council said this week that it would reconsider permission in light of “new evidence”, citing guidance from the Committee on Climate Change (CCC) published in December that recommends that the use of coking coal should be curbed by 2035 if the UK is to meet its 2050 net-zero target. 

West Cumbria Mining said in its application that the mine would be closed by the end of 2049.

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Last month the CCC wrote a letter to minister of housing and communities Robert Jenrick urging the government to reconsider all new coal developments. 

“The opening of a new deep coking coal mine in Cumbria will increase global emissions and have an appreciable impact on the UK’s legally binding carbon budgets,” Lord Deben, head of the CCC, wrote. 

“It is also important to note that this decision gives a negative impression of the UK’s climate priorities in the year of COP26,” he added. 

In the letter, the CCC offered to help frame guidance for local councillors and planners who are involved in making decisions with climate implications.

The Cumbria Council decision to backtrack on a new coal mine has nothing to do with ‘new information’ and everything to do with the power of people getting organised

— Ellen Gibson (@ellenrgibson) February 9, 2021

Rebecca Willis, professor in practice at Lancaster University, told Climate Home News the review did not necessarily mean the council would cancel the project.

Councillors had seen “plenty of independent expert evidence” on the climate impacts before approving the mine, she said. But the CCC advice was harder to ignore and doing so could lay them open to legal challenge.

The local authority is under “huge political pressure” and “trying to look for a face-saving way out,” she said. 

“It’s a really bad look for a government who claims to be a climate leader and who is hosting the most important climate summit ever to be telling other governments what to do and then supporting a coal mine in its own backyard. At best that’s confusing and at worst it’s hypocritical.”

In a letter sent to Jenrick in October, 13 independent climate experts argued that a 2049 end date was “wholly inappropriate” and would “hinder the ability of UK industry, particularly the steel industry, to innovate and decarbonise.”

Fatal Himalayan glacial lake outburst highlights destabilising effect of warming

Unbelievably excellent news!! The power of climate change political commitments to actually prevent new high carbon major infrastructure projects from going ahead may at last be reaching the levels needed (ref Heathrow).

Next up, the £27bn road building programme https://t.co/U5DUpHq4CA

— Leo Murray @crisortunity@urbanists.social (@crisortunity) February 9, 2021

Swedish climate activist Greta Thunberg questioned the UK’s net zero commitment after the government refused to intervene last month.

“This really shows the true meaning of so called ‘net zero 2050.’ These vague, insufficient targets long into the future basically mean nothing today,” she said. 

Jill Perry, chair of a local green party in Cumbria, welcomed the council’s decision to review the application. 

“If the mine goes ahead it risks not just blowing the government’s sixth carbon budget out of the water but also Cumbria’s net zero goal,” she told Climate Home News, adding that besides increasing emissions, the mine posed a serious risk to local woodland and wildlife.

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West Cumbria Mining has said that the mine will create 500 jobs in a region struggling with high unemployment. 

“There’s no doubt that the area needs jobs, but jobs in clean industries would provide a much more certain future for the area,” said Perry.

Labour lawmaker and former energy minister Ed Miliband also welcomed the council’s announcement this week. 

“The government now has a second chance to do the right thing and call it in. The UK cannot claim to be a climate leader whilst opening a new coal mine and ministers must realise that by doing so they undermine our credibility both at home and abroad,” he said in a statement. 

The post Plans for UK coal mine suspended after criticism of net zero commitment appeared first on Climate Home News.

In one in a series of executive orders aimed at tackling the climate crisis in the US and abroad, Biden committed his government “to identify steps through which the United States can promote ending international financing of carbon-intensive fossil fuel-based energy while simultaneously advancing sustainable development and a green recovery”.

The order stated the secretary of state together with the treasury and energy secretaries would work with the US Export–Import Bank and the head of the Development Finance Corporation to achieve this.

Biden also directed federal agencies to eliminate fossil fuel subsidies. “Unlike previous administrations, I don’t think the federal government should give handouts to big oil to the tune of $40 billion in fossil fuel subsidies,” he said in a speech before signing the executive order.

A few hours earlier, presidential climate envoy John Kerry told a panel discussion organised by the World Economic Forum that Biden had asked his administration to develop “a plan for ending international finance of fossil fuel projects with public money”.

The announcement brings the US in line with the EU, where foreign ministers have called this week for an end to fossil fuel finance abroad. Last month, the UK committed to ending its financing of oil and gas projects, but the policy is yet to come into force.

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The US International Development Finance Corporation (DFC) and its predecessor, the Overseas Private Investment Corporation, approved around $4 billion for overseas fossil fuel projects over the past five years, according to climate group Friends of the Earth. Since 2018, the US Export-Import Bank greenlit over $5bn for fossil fuel investments abroad. 

This included a $4.7bn loan for a natural gas project in northern Mozambique, $400 million in financial support for Mexican oil company Pemex, and an $18m loan for oil and gas production in Vaca Muerta, western Argentina.

The US Export-Import Bank also provided a $805m loan for the Kusile power plant, a 4,800MW coal-fired station that is currently under construction in South Africa. 

Many of these projects were approved under Donald Trump, Han Chen, international energy policy manager at the Natural Resources Defense Council, told Climate Home News. 

“You had a lot of fossil fuel promoters, trade associations and interest groups really using the Trump administration and the apparatus of US diplomacy to push deals in a lot of countries. There was a lot of pressure for countries to agree to LNG deals – they were part of the trade and economic negotiations,” said Chen.

In October the DFC said it planned to invest in fossil fuel projects in several countries in southeast Asia to “help expand access to secure and reliable energy.”

One project under consideration by the DFC involved the construction of a 2,250MW gas plant in Binh Thuan province, southeast Vietnam.

“Without that very pro-fossil fuel export agenda, what [will] happen to all of these projects that, frankly, financially weren’t really viable?” Chen added. 

John Kerry promises ‘significantly’ more climate finance at adaptation summit

Campaigners welcomed Biden’s announcement but said questions remained around when the policy could be implemented and whether the order included ending funding for methane gas. 

“The executive order leaves the door open to only covering coal, rather than all fossil fuels with the questionable language ‘carbon-intensive fossil fuel-based energy’,” Kate DeAngelis, international finance manager at Friends of the Earth, told Climate Home.  

Gas is commonly touted as a cleaner fuel than coal, because it emits around half the carbon dioxide when burned for energy. But methane leaks or flaring during extraction, processing and transport leads to fugitive emissions which can significantly worsen the fuel’s climate impact. 

Chen said there have been indications that the Biden administration is set on moving away from financing gas projects. “Kerry has really been hammering down the point that there is no time left for doing gas,” she said. 

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Speaking at the World Economic Forum, Kerry commented: “The problem with gas is if we build out a huge infrastructure for gas now to continue to use it as the bridge fuel, when we haven’t really exhausted the other possibilities, we’re going to be stuck with stranded assets in 10, 20, 30 years.”

Kerry announced this week that the US would draft a climate finance plan and pledged to “significantly increase” international finance for adaptation and resilience initiatives. 

In his executive orders, Biden said he would reconvene the Major Economies Forum. Launched by the Obama administration, the forum brings together the world’s 17 largest emitters to discuss high-level leadership and collaboration on climate action.

“Fossil fuel financing is definitely going to be a big issue [at the forum]. Coal financing in particular will be at the forefront. There will be a lot of countries that are heavily reliant on coal [attending]. That is one of the major conversations [that needs] to happen first – getting commitments to end financing on coal,” said Chen.

The post US plans to end fossil fuel finance overseas, threatens billions in support for oil and gas appeared first on Climate Home News.

In October, president Moon Jae-in announced that South Korea aims to achieve carbon neutrality by 2050, turning an election promise of a Green New Deal into a policy pledge. 

Achieving net zero emissions by 2050 is a tall order for South Korea, which is the world’s fourth-largest importer of coal and the third biggest investor in overseas coal projects. It will require a complete phase out of coal and a rapid acceleration of clean technologies. 

“South Korea is a notable laggard in the green energy transition,” Joojin Kim, managing director of South Korean campaign group Solutions For Our Climate, told Climate Home News.

Renewables make up just 4% of the country’s electricity mix, the lowest share of any developed country member of the International Energy Agency.

In December, South Korea submitted its 2050 carbon neutrality strategy to the UN, outlining its plans to decarbonise the country’s energy, agriculture and transportation sectors. Solar and wind energy as well as hydrogen form are central to the plans.

South Korea’s net zero pledge and those of other major economies, such as Japan and China, are expected to spur investment into renewables and batteries.

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Since Moon’s announcement, South Korea has unveiled plans to build the world’s largest floating wind farm. In December, Korea Hydro & Nuclear Power signed a deal with Spanish company OW Offshore to construct a 1.5 GW wind farm off the coast of the southern city Ulsan. The government has said it aims to develop 4.6 GW of offshore wind farms by 2026. 

SK Group, one of South Korea’s top oil producers, announced this month that it will invest $1.5 billion in the US hydrogen fuel cell maker Plug Power. The company makes hydrogen cells for electric vehicles and builds fuelling stations in North America.

The investment, which will make SK Group Plug Power’s largest investor, is another sign that Korean companies are starting to shift away from fossil fuels and accelerate the green energy transition following Moon’s pledge. 

As part of its Green New Deal, South Korea aims to have 1.13 million electric and 200,000 hydrogen vehicles on the roads by 2025. 

Coal, however, remains a big problem for South Korea. In its 2050 strategy, the country says it plans to phase out all coal plants or convert them to run on liquefied natural gas. 

But it has not set a date for ending coal power and currently has 7.2 GW of coal capacity under construction, according to Global Energy Monitor data. According to Climate Analytics, South Korea must phase out coal power by 2029 if it is to meet its obligations under the Paris Agreement. 

South Korea’s focus on gas as a “clean transition fuel” conflicts with South Korea’s 2050 carbon neutrality ambition, said Kim. Gas is commonly touted as a cleaner fuel than coal, because it emits around half the carbon dioxide when burned for energy. But methane, which can leak into the atmosphere during gas extraction or transport, contributes significantly to global warming. 

Kim said that the national power plan urgently needs updating as in its current form it states that gas units can continue operating beyond 2060. “It needs to be revised to be consistent with the 2050 carbon neutrality goal.”

The post South Korea 2050 net zero pledge spurs renewables investment appeared first on Climate Home News.

Minister of housing and communities Robert Jenrick said on Wednesday that he would not intervene in plans to open the coal mine in Cumbria, northwest England.

The £165 million West Cumbria Mining project is to extract coking coal from below the Irish Sea for steel production, which will emit an estimated 8.4 million tonnes of carbon dioxide equivalent a year when burned. 

Campaigners argue that the government’s decision breaches the UK’s climate commitments and weakens its leadership credentials ahead of hosting Cop26 climate talks in November. A spokesperson for the Cop26 presidency declined to comment.

The UK has a target in legislation to reduce emissions to net zero by 2050 and the government must meet a series of shrinking “carbon budgets” set by an independent commission to get there.

West Cumbria Mining says the mine will create 500 jobs in a region struggling with high unemployment and that it will be closed by the end of 2049, making it compatible with the UK’s 2050 net zero target.

Comment: 10 myths about net zero targets and carbon offsetting, busted

In a letter to Jenrick, 13 independent climate experts argued that a 2049 end date is “wholly inappropriate” and that it will “hinder the ability of UK industry, particularly the steel industry, to innovate and decarbonise.”

“It’s not enough to claim compliance with the Climate Change Act by setting a 2049 end date. [The project] needs to be compliant with the carbon budgets,” Rebecca Willis, one of the signatories and expert lead at Climate Assembly UK, told Climate Home News. “It is very hard to see how you can be ratcheting down carbon emissions successfully if you have projects like this.”

Willis added: “This government has consistently and loudly shown its support for the net zero target, and will be hosting the crucial Cop26 climate summit… The government’s decision to allow long-term investment in coal, the most polluting of all fossil fuels, is completely at odds with its stated ambitions, and will slow national and global progress on climate.”

Energy policy professor Jim Watson said on Twitter “the future has to be decarbonised steel”, adding: “This decision is not compatible with global leadership of the net-zero transition.”

Swedish youth activist Greta Thunberg took the case as an example to question the credibility of net zero targets in general. “These vague, insufficient targets long into the future basically mean nothing today,” she tweeted.

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In 2016, the UK government said it would close all coal power plants by 2025. The UK formed an alliance with Canada to end coal power generation and “accelerate the international transition from burning coal to using cleaner power sources.” It has not set an end date for the use of coal in steel production, however.

In a statement, the ministry of housing, communities and local government said the planning application should be determined by the local council. “Planning decisions should be made at a local level wherever possible. This application has not been called-in and is a matter for Cumbria County Council to decide,” a spokesperson said. 

Tim Farron, a Liberal Democrat lawmaker representing the Westmorland and Lonsdale constituency in south Cumbria, described the new mine as a “complete disaster for our children’s future.” 

“It’s utter and rank hypocrisy for this Conservative Government to claim one minute that they care about protecting our environment, and in the next give the green light to a deep coal mine in Cumbria,” Farron said on Twitter. 

Have just received a letter from Government saying they have rejected my request for them to call in the planning application for a new coal mine in Cumbria.

This is an almighty backwards step in the fight against climate change and a complete disaster for our children's future.

— Tim Farron (@timfarron) January 6, 2021

Labour lawmaker and former energy minister Ed Miliband also opposed the government’s decision, commenting on Twitter: “Government rhetoric about climate exposed as hollow by their decisions when they refuse to even call in a new coal mine. Not the way to build a fair, zero-carbon future with sustainable jobs, or show an example to all the other countries we need to move away from coal.”

The post UK net zero commitment questioned, as government allows new coal mine appeared first on Climate Home News.