Coal Power Policies across the Globe: An Overview

by Anandita Ketkar

In the wake of mounting pressures from international investors to cut investment in fossil fuels, are countries responding to the need to reduce coal emissions? 

The demand for coal is global and the requirement for coal is multi-faceted; thermal coal is needed to generate electricity while metallurgical coal is used in steel. Recently, there has been a push to reduce investment in coal-fired operations. JP Morgan and Fidelity, two major investment firms, have demanded that five of Asia’s most polluting power generation companies cut their greenhouse gas emissions in China, Hong Kong, Japan and Malaysia [1]. 

Coal policy in Asia

China is both a heavy consumer of and investor in coal. The nation invests 30% of the $52bn worth of finance for foreign coal projects [7]. Although the Chinese government has agreed to reach carbon neutrality by 2060, it provides a strong demand for coal alongside India, South Korea and Japan [2]. Prices for thermal coal have thus surged in recent months; the International Energy Agency this month forecast an increase in global coal demand in 2021 as fossil fuel consumption proliferates in Asia (Global Energy Monitor) [2]. 

Developments in Europe

Germany will have to “phase out coal in 2030 even without the new German climate law” according to Marco Wünsch of the Prognos-Institut, a Basel-based think-tank [8]. Germany’s open cast lignite mines may have to close their operations sooner and be paid compensation [8]. The focus is now on the elections in September, which could change the trajectory for government policy on coal resources. The UK has similarly pledged to phase out coal-fired power generation by 2024 [3]. Germany and Poland compose 51% of the EU’s installed coal capacity and generate 54% of the EU’s emissions from coal. [10] 

Africa 

On the African continent, Anglo-American has demerged South African coal assets into a new holding company, Thungela. Likewise, Rio Tinto sold its last coal mine in 2018 [4]. The issue of demand remains; as a new company, Thungela’s customers are in Asia which is largely dependent on coal-fired power [4]. 

Australia

This country demonstrates the contention that has been caused by international pressure to commit to net zero emissions; the government opposes the early closure of old power plants on the premise that renewable sources of energy could induce power cuts [5]. Although Energy Australia has announced that it will close the Latrobe Valley coal-fired power plant four years earlier than originally planned, political conversations regarding fossil fuels have impacted the nation’s government [5]. Australia is among the top 5 of coal exporting countries, largely exporting  thermal coal to India [9]. 

What next? 

The G7 have signed a pledge to halt all government investment in coal-fired power stations by the end of 2021, without a date for domestic coal [5]. However, future energy security may require more low-carbon alternatives to replace fossil fuels than are available at the moment [5]. The majority of global reductions in CO2 emissions between now and 2030 will have to come from technologies that are available today. However, the reductions required in 2050 might come from technologies that are currently in the demonstration or prototype phase [6].

References: 

[1] Global investors pressure Asian utilities to cut emissions, Financial Times https://www.ft.com/content/c1e59e76-3ba3-44d8-b939-15723a61047c accessed 020221 
[2] Coal industry feels heat as Germany doubles down on climate goals,  https://www.ft.com/content/80b35489-a18d-4e51-8665-167a7d9e7ce1  accessed 020221 
[3] Coal industry feels heat as Germany doubles down on climate goals, Financial Times https://www.ft.com/content/b090afc4-c482-4e85-9cbc-ba3bbf2ad37e , accessed 020221 
[4] Anglo American coal spin-off drops on demerger, Financial Times  https://www.ft.com/content/bd73651f-b9ed-481f-b049-fe768a733d9d, accessed 020221 
[5] Member countries push back against IEA’s net zero road map, Financial Times. https://www.ft.com/content/4bbae4a3-cf1f-4a09-9fe5-bf2dc2ee2c9c, accessed 020221 
[6] Pathway to critical and formidable goal of net-zero emissions by 2050 is narrow, Financial Times. https://www.iea.org/news/pathway-to-critical-and-formidable-goal-of-net-zero-emissions-by-2050-is-narrow-but-brings-huge-benefits-according-to-iea-special-report accessed 020221 
[7] Asia’s developing economies shun coal, Financial Times. https://www.ft.com/content/da7cf71b-fe16-4116-9277-034038d64046, accessed 020221 
[8] Coal industry feels heat as Germany doubles down on climate goals, Financial Times,  https://www.ft.com/content/b090afc4-c482-4e85-9cbc-ba3bbf2ad37e , accessed 020221
[9] Australia exports record high thermal coal to India, Argus, https://www.argusmedia.com/en/news/2221124-australia-exports-record-high-thermal-coal-to-india , accessed 050621
[10] Coal phase-out, Climate Analytics, https://climateanalytics.org/briefings/coal-phase-out/ , accessed 260621 
Categories International Policy

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